EXECUTIVE SUMMARY

By Allshade being one of the largest shade port carport manufacturers in the Greece,
we have to maintain a high standard and cost effective product line. To maintain this
we have to investigate and search for faults and problems within our production
process and view how we can present improvements, to maintaining an effective
production line.

By breaking down the production process into primary stages and secondary
analytical stages, identifying the bottleneck is an easy process. Noticing that the
problem is having too much waste (muda), introducing Lean or Just-In-Time
concepts, we can produce only what is needed, only when it is needed and only how
much is needed. We can provide for cost-effective production and delivery of only the
necessary quantity of parts at the right quality, at the right time and place, while using
a minimum amount of facilities, equipment and materials. We can figure out the
amount of time and costs that can be saved by implicating these methods. Just-In-
Time methods have the capacity, when properly adapted to the organisation, to
strengthen the organisation's competitiveness in the marketplace.

In this paper we discuss the production process within Allshade and figure out what
are the best solutions in improving our product line and reducing costs and
unnecessary stock, producing better quality products, services and greater growth
potential. Thus Allshade’s Visions, Missions and Strategic Objectives can be reached
in the near future, making us a leader in within our Industry.

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 1. INTRODUCTION

Company Profile

Allshade is a well known manufacturer of shade net carports and a shade net material
distributor with over 10 years experience of manufacturing excellence in Greece. We
offer a wide variety of attractive, cost-effective, practical shade nets and other
products to property developers, home owners and industrialists.

Our products are designed professionally, manufactured creatively, and erected and
installed quickly. They offer adequate protection against elements such as UVA/UVB
resistant, are rust-proof and require no maintenance. Our structures have been tested
in all sorts of conditions and have been developed to adapt to every special
application having a stylish design.

Allshade has created its reputation with its steady commitment to conforming to the
highest quality standards and with its consistency in all sectors of its business
activities.

Allshade is situated in Chalkida/Evia and its factory located in Drosia which can be
visited and viewed with its advanced machinery for the production of all the parts
used for the installation of our structures.We are a family-owned business, and have
proven consistently that we have the products, value-for-money and quality necessary
to enable us to meet customer expectations at all times.

Industry

Allshade manufactures a range of metal components used to build up shade net

carports. Consisting of metal base plates, cover hats, pipe corner connectors, top
connecting stars and all the brackets that fit onto all the different sized metal tubes. It
is equipped with all the necessary machinery for the production of each individual
component. When a sufficient amount of components are produced they are sent for
hot dip galvanizing. Hot Dip Galvanizing is the process in which a coating of zinc and
zinc iron alloys is metallurgical bonded to a steel or iron substrate by dipping it into
molten zinc. A coating, in the general sense, is a generic term for one or more layers
of interconnected coating materials on a base. The hot dip galvanized coating is
protected from atmospheric and chemical attack by the organic coating covering it.
The galvanizing remains underneath in a condition near to the original and therefore
lasts longer.

Vision

• To be continuously growing as a company

• Harness our growth potential and sustain profitable growth
• Deliver high quality and cost competitive products and be the first choice of
customers

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 • Create an inspiring work environment to unleash the creative energy of people
• Achieve excellence in enterprise management
• Be respected, ensure clean and green environment and develop vibrant
communities around us

Mission

• We aim to support long-term economic growth, social stability, prosperity and

progress in all of our regions.
• Be proactive in conserving environment, maintaining high levels of safety and
addressing social concerns.
• We want to achieve consistent and long-term growth of our business,
transforming Allshade into a leading and reliable shade net carport
manufacturer and shade net material distributor.

Strategic Objectives

• Increase turn over

• Achieve higher levels of customer satisfaction than competitors
• Sustain the right attitude amongst employees and facilitate them to excel in
their professional, personal and social life
• Improvement of product and service quality
• The application of the latest technologies
• Reducing costs and increasing operating efficiency
• To be recognized as an leading business organization by 2011-2012

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 2.PRODUCTION PROCESS

The way that the company creates its products is known as the production process.
There are three main parts to the production process:

• Inputs (Raw Materials)

• Transformation Process
• Outputs (Finished goods)

Due to the fact that there is a variety of different products to be made and that the
volume of production is not that large, the company resorts to production in batches.
There are general purpose machines that are utilized for the production of different
parts. There is special care taken to consideration in scheduling the order in which the
batches are to be produced. The company employs and uses a process layout, similar
machines or equipment are used to do more than one or two functions.
As Chase, Aquilano and Jacobs (1998) say “Such a structure is generally employed
when a business has a relatively stable line of products, each of which is produced in
periodic batches, either to customer order or for inventory. Most of these items follow
the same flow pattern through the plant.”

There are many advantages in the use of batch production such as:

• Better utilization of machinery (Fewer machines are required)

• Higher degree of flexibility regarding to equipment or manpower allocation
for specific tasks.
• Comparatively low investment in machines is needed
• There is generally greater job satisfaction
• Specialized supervision is possible

Allshade purchases all the necessary inputs such as different sized metal pipes and
metal bars to transform into outputs which are all the necessary parts used in the
installation of shade net carports. All these parts are designed and manufactured by
specialized personal. All the parts are sent for hot dip galvanizing before they are
stored. In diagram 1.1 shown below is a basic ASME Block Diagram of the
production process of the steel inputs being transformed into outputs which are placed
in a storage warehouse until they are used in the installation of a carport.

The production process of all the parts used to build up a shade net carports have very
similar procedures. They have the same inputs but are transformed into different
outputs.

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 3. PRODUCTION PROCEDURE OF STEEL COMPONENTS

METAL INPUTS
(STEEL PIPES & 1.CUTTING 2.SHAPED 3.PRESSED 4.WELDED
STEEL BARS)

5.INSPECTION

7.HOT-DIP
9.TRANSPORT 8.INSPECTION 6.TRANSPORT
GALVANIZING

10.STORAGE

11. 12.
TRANSPORT INSTALLATION

Diagram 1.1 ASME Block Diagram

i. Primary description of production stages

• Stage 1 – The steel pipes and the steel bars are cut.
• Stage 2 – The steel bars are shaped. Pipes are bent.
• Stage 3 – Holes are punched into the steel bars. End of pipes are pressed.
• Stage 4 – The steel bars and plates are welded together.
• Stage 5 – The welding joints are inspected.
• Stage 6 – The steel parts are transported for galvanizing.
• Stage 7 – The steel parts are hot-dip galvanized.
• Stage 8 – The hot-dip galvanizing is inspected
• Stage 9 – The steel is loaded and transported to storage
• Stage 10 –The steel parts are stored.
• Stage 11 – The steel parts are transported.
• Stage 12 – The steel parts are fitted together in the installation of the finished
carport.

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 ii. Secondary description of production stages

• Stage 1 – The steel pipes of all different sizes are cut down to specific
lengths depending on where they will be used. The steel bars are cut down
to different sizes depending on where they will be used.

• Stage 2 – The pipes are bent at a specific angle with a pipe bending
machine. The steel bars are shaped and bent into different shapes
depending on where they will be used.

• Stage 3 – The steel pipe ends are pressed and a hole is punched through
the pressed section of the pipe. Holes are punched into the steel shaped
bars with a steel punch shearing machine.

• Stage 4 – The steel pipes and bars are sent to the welding section to be
welded together. Different parts are welded together for producing each
different part.

• Stage 5 – The welding on the steel parts are inspected for cracks, porosity,
incomplete penetration, lack of sidewall penetration and similar defects
that can compromise weld strength.

• Stage 6 – The are loaded and transported to a hot-dip galvanizing plant.

• Stage 7 – The steel parts are off loaded and prepared for hot-dip
galvanizing which is the process in which a coating of zinc and zinc iron
alloys is metallurgical bonded to the steel substrate by dipping it into
molten zinc. A coating, in the general sense, is a generic term for one or
more layers of interconnected coating materials on a base. The hot dip
galvanized coating is protected from atmospheric and chemical attack by
the organic coating covering it.

• Stage 8 – The Galvanizing is left to cool and then inspected. Inspecting the
hot-dip galvanized coating for conformance to specification is the process
of checking complete coating coverage and consistent coating thickness.
The two most important components to an inspection are a simple visual
inspection to ensure coating coverage and a brief series of coating
thickness measurements to assure conformance to the appropriate
specification.

• Stage 9 – The finished steel parts are loaded and transported to a storage
warehouse.

• Stage 10 – They are stored in a warehouse until they are either shipped of
to retailers or are used for the installation of shade net carports done by our
own workshops.

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 • Stage 11 – Specific needed parts are loaded and transported to the site
where the installation of the carports will be performed.

• Stage 12 – The installation of the steel parts to produce the final finished
product of an installed shade net carport. They are installed by our own
workshop personnel.

4. PROBLEM IDENTIFICATION (Bottleneck)

Identifying the problem in the production process is a simple task. It has been
identified as the waste of overproduction. Overproduction waste not only ties up
working capital in inventory, it necessitates warehouse storage space, forklift trucks to
move goods about, trucks for the transportation, material handlers to operate trucks,
staff to maintain the use of all the above mentioned, and so on. Overproduction is the
location of the true bottleneck and thereby invites investments in the wrong
equipment, resulting in excess capacity as well as excess costs. The problem is
situated in stages 9, 10 and 11 where there is excess time and extra cost wasted on the
transporting, storing and staff handling of the goods.
Physical costs are the costs of production, transportation, and inventory storage.
Market mediation costs arise when supply exceeds demand and a product has to be
marked down and sold at a loss or when supply falls short of demand, resulting in lost
sales opportunities and dissatisfied customers. (Fisher, 1997,p107)

i. Cost and Time Calculations

Time (man-
Cost hours/day)
Transport 90 Euro/day 3hrs/day

Manpower 240 Euro/day 12hrs/day

Storage 120 Euro/day

Total 450 Euro/day 15hrs/day

Table 1.1. Cost and time wasted

In Table 1.1 above the cost per day and the time in man-hours per day, stated for the
transportation, manpower and storage of goods from stages 9,10 and 11.

5. JUST IN TIME PRODUCTION (JIT)

By introducing Just-In-Time Production we can produce only what is needed, only

how much is needed, and only when it is needed. Any deviation from true production
needs will be condemned as waste. Just-in-time (JIT) is a disciplined approach to
improving overall productivity and eliminating waste. It provides for the cost-
effective production and delivery of only the necessary quantity of parts at the right
quality, at the right time and place, while using a minimum amount of facilities,

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equipment, materials and human resources. JIT is dependent on the balance between
the supplier’s flexibility and the user’s flexibility. (Slack, Chambers, Johnston 2007)
JIT is a Japanese management philosophy which has been applied in practice since
the early 1970s in many Japanese manufacturing organisations. It was first developed
and perfected within the Toyota manufacturing plants by Taiichi Ohno as a means of
meeting consumer demands with minimum delays. Taiichi Ohno is frequently
referred to as the father of JIT.

JIT manufacturing has the capacity, when properly adapted to the organisation, to
strengthen the organisation's competitiveness in the marketplace substantially by
reducing wastes and improving product quality and efficiency of production.
Just in time is a ‘pull’ system of production, used to meet customers demand exactly
in time, quantity and quality, helping in the reduction of waste in time and
overproduction. In this way, the Just in Time Production method saves money being
tied up for long periods in unused stocks, raw materials and unsold finished products,
therefore effective in reducing costs for the manufacturer. This theory also helps in
devising systems to identify problems hence improving quality and production. As
Krajewski and Ritzman (1996) say “By spotlighting areas that need improvement, JIT
systems lead to continuous improvement in quality and productivity.”

Just in time is a ‘pull’ system of production, so actual orders from customers provides
the signal for when a product should be manufactured. Demand-pull will enable our
firm to produce only what is required, in the correct quantity and at the correct time.
This means that stock levels of raw materials, components, work in progress and
finished goods can be kept to a minimum. This will require a carefully planned
scheduling and flow of resources through the production process. Some modern
manufacturing firms use sophisticated production scheduling software to plan
production for each period of time, which includes ordering the correct stock.

The major elements of lean thinking are shown in Diagram l.2. (Piercy, Morgan,
1997, p683) They can be described and summarized in the following terms. Drawing
on the models provided by studies of such companies as Toyota, Porsche and Pratt &
Whitney, the lean thinking model extends earlier views of lean production into a
number of principles:

• the definition of value from the perspective of the end customer in terms of
the product/ service offering delivered
• the identification of the value streams for each product and the elimination
of muda (waste) in the entire supply chain
• organising value creating activities
• responding to the pull of product through the supply chain by customers to
eliminate stocks and
• the pursuit of perfection.

Advantages of JIT Production

• Lower stock holding means a reduction in storage space which saves rental
and insurance costs.

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 • As stock is only obtained when it is needed, less working capital is tied up in
stock.
• There is less likelihood of stock perishing, becoming obsolete or out of date
• Avoids the build-up of unsold finished product, no waste by having excess
stock.
• The finished product should be cheaper for the customer to purchase.
• Less time is spent on checking and re-working the product of others as the
emphasis is on getting the work right first time.

DEFINITIONOF VALUE

IDENTIFICATIONOF VALUESTREAMSANDTHEREMOVALOF
MUDA (WASTE )

ORGANIZING

RESPONDINGTOPULLTHROUGHTHESUPPLYCHAIN

THEPERSUIT OF PERFECTION

Diagram 1.2. Major Elements of Lean Thinking. (Piercy, Morgan, 1997)

6. PRODUCTION PROCESS WITH JUST-IN-TIME

METAL INPUTS
(STEEL PIPES & 1.CUTTING 2.SHAPED 3.PRESSED 4.WELDED
STEEL BARS)

5.INSPECTION

7.HOT-DIP
9.TRANSPORT 8.INSPECTION 6.TRANSPORT
GALVANIZING

10.
INSTALLATION

Diagram 1.3 ASME Block Diagram with Improvement

i. Primary description of production stages

• Stage 1 – The steel pipes and the steel bars are cut.

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 • Stage 2 – The steel bars are shaped. Pipes are bent.
• Stage 3 – Holes are punched into the steel bars. End of pipes are pressed.
• Stage 4 – The steel bars and plates are welded together.
• Stage 5 – The welding joints are inspected.
• Stage 6 – The steel parts are transported for galvanizing.
• Stage 7 – The steel parts are hot-dip galvanized.
• Stage 8 – The hot-dip galvanizing is inspected
• Stage 9 – The steel is loaded and transported.
• Stage 10 – The steel parts are fitted together in the installation of the finished
carport.

ii. Secondary description of improved production stages

• Stage 9 – After the steel parts have been hot-dip galvanized, instead of being
transported to a storage warehouse they are transported directly to the site
where the installation process of the finished carport is taking place. The entire
production process will only take place once the customer gives the signal for
when the products should be manufactured. This is the “pull” system of Just in
time production.

7. IMPROVEMENTS WITH THE IMPLEMENTATION OF LEAN AND

JUST-IN-TIME PRODUCTION

The reason for wanting to implement this new improvement of Just-In-Time

Production is to reduce and minimize waste, which will emphasize on holding little
stock. This will lead to reduction in storage space and will save money in rental and
insurance costs, transportation and on paying extra staff for their operation and
maintenance. (Piercy, Morgan, 1997, p684) “The length of time a product has been on
the shelf is unlikely to be a key driver of customer satisfaction.” As a result of this,
less working capital will be tied up in stock since the stock will be produced when it
is needed. From a macro-enterprise perspective the objectives of JIT are to improve
the competitive position of the enterprise, to increase the efficiency of the applicable
production processes, and to reduce the levels of waste, in respect of materials, time
and effort in the overall production process. (Steyn, Du Toit, 2010,p3)

COST
TOTAL
OLD NEW DIFFERENCE

Transport 90Euro/day 30Euro/day 60Euro/day

Manpower 240Euro/day 120Euro/day 120Euro/day

Storage 120Euro/day No Cost 120Euro/day

Total 450Euro/day 150Euro/day 300Euro/day

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 TIME
TOTAL
OLD NEW DIFFERENCE

Transport 3hrs/day 1hr/day 2hrs/day

Manpower 12hrs/day 6hrs/day 6hrs/day

Total 15hrs/day 7hrs/day 8hrs/day

Table 1.2. The difference in cost for before and after

Table 1.3. The difference in man-hours/day for before and after

In Table 1.2 we show the total difference in cost per day if Just-In-Time Production is
implemented into the production process of Allshade. The transportation process will
be deducted in the stage after the galvanization process and there will be a total of 60
Euro saved per day. This cost was mainly spent on road fees, petrol, truck drivers and
maintenance. The manpower fees will be reduced to 120 Euro per day with a
deduction of a total of 120 Euro per day. This cost was mainly spent on the operation
and maintenance of forklifts in the storage warehouse, material handlers and staff.
The storage has been reduced to no costs as the finished products will be transported
directly to the site where the installation of the carports will be performed.

In Table 1.3. The total amount of man-hours per day saved is shown. With the new
implementation of lean production or JIT production a total of 2hours per day are
saved with the transportation of the goods from the galvanizing process to the storage
warehouse. A total amount of 6 hours will be saved in manpower as there will be no
operation of forklifts and staff working in the storage warehouse. There will be no
products being overproduced and there will be no need for a warehouse to use as
storage. Therefore it offers the company increasing efficiency in the production
process reducing levels of waste, time and effort in the overall production process. “It
is not uncommon for companies using JIT to report large increases in efficiency. Such
efficiency gains are attributable to reductions in four principal areas; number of

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quality rejects (30-60%), production time (50-90%), capital expenditures (25-30%),
and inventory.” (Hall, Ernest, 1989, p315)

As (Black, 2009, p35) states “The key is to eliminate waste, because waste reduction
efforts lead to effective cost cutting and process improvement.” Allshade has the time
and the resources to implement this new improvement of lean and JIT Production.
Wasting resources equals losing money and in business, no one likes to lose money,
especially in a downward economy, no one can afford to lose money. (Hernandez,
2009, p37) It is obvious that at times like this we must face the fact that many
companies build great products, and cause of this so do our competitors. (Black, 2009,
p35) Allshades competitors are moving towards lean thinking, and in order to stay a
leader and to have a significant advantage, the implementation of lean production
within the production process will give us that advantage within our market.

8. SUGGESTIONS

Due to the fact that there is an improvement by implicating Lean and Just-In-Time
Production concepts within the production process of Allshade, there are suggestions
on whether other departments within the company should implicate lean thinking for
improvement. The Just in Time system is suitable not only for manufacturing, but also
for customer relations, sales and marketing, product planning, R&D, design,
production engineering, logistics, procurement, administration and management, for
enhancing business process innovation and introduction of new concepts and
procedures. (Amasaka, 2009, p14). Lean and Just-In-Time Systems should be
important factors for all the departments in Allshade as they will eliminate waste,
bringing efficiency in finances, customer relations, sales, marketing and so forth.

“Twenty years ago the lean approach was relatively radical, even for large and
sophisticated companies. Now the lean, just-in-time approach is being adopted outside
in traditional automotive, high-volume and manufacturing roots. But wherever it is
applied, the principles remain the same.” As stated by Slack, Chambers, Johnston
(2007). Just-In-Time was first developed and perfected within the Toyota
manufacturing plants. Many companies are on the verge of switching to a just-in-time
inventory system, to compliment the millions of companies that have already
implemented the system. Just-in-time production is considered to be on the leading
edge of technological advancement.

9. CONCLUSION

The future contribution of Lean or Just-In-Time Production concepts within the

production process of the metal components in the company will be a key in
developing an organization with strengthened competitiveness in the marketplace.
Less storage space will be required, this could allow the use of the space made
available to be sold, leased or used for other business purposes. With less excess
inventory in the warehouse, some of the new space could be made available for more
efficient storage of items, for example, there is no stacking item A on the floor in

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front of B, then digging item B out when needed. This reduces labour waste and
therefore costs. With less material coming in large batches, there is less labour needed
to cover peak demands and therefore less overall labour required. Any warehouse or
Distribution centres can take advantage of a lean flow distribution strategy.
(McCreary, 2009, p20)

“Just-In-Time is only one element or goal which will be the outcome of a concept
which can harness the resources of everyone on the payroll to work towards making
their company the best in its business” says Hutchins (1989).
A total difference of 300 Euro and the total of 8 man-hours will be saved per day with
the implementation of Just-In-Time. There will be an elimination of overstock which
does not get used effectively. It will move towards the elimination of all waste in
order to be more dependable, producing higher quality products and services and,
above all, operate with lower costs. (Slack, Chambers, Johnston 2007)

10. BIBLIOGRAPHY

Amaska, K., (2009). “The Foundation for Advancing the Toyota Production System
Utilizing New JIT”. Journal of Advanced Manufacturing Systems. 8(1). June. P5-26.

Black, J.R., (2009). “Lean Manufacturing”. Tooling and Production. 75(3).

March/April. P34-35.

Chase, B.R., Aquilano, J.N., and Jacobs, R.F., (1998). “Production and Operations
Management: Manufacturing and Services”. 8th Edition. McGraw-Hill Companies.
USA

Fisher, M.L., (1997). “What is the Right Supply Chain for your Product”. Harvard
Business Review. 75(2) March/April. P105-116.

Hall, J., and Ernest, H., (1989) “Just-In-Time Management: A Critical Assessment”.
Academy of Management Executive. 3(4). November. P315-318.

Hernandez, G.M., (2009). “Business Restructure Based on Lean Thinking

Philosophy”. Caribbean Business. 37(8) February. P37

Hutchins, D., (1989), “Just-In-Time”. 2nd Edition. Gower. GB

Krajewski, J.L., and Ritzman, P.L., (1996). “Operations Management: Strategy and
Analysis”. 4th Edition. Addison-Wesley Publishing Company. USA

McCreary, J.P., (2009). “The Biggest Losers”. Material Handling Management.

64(12). December. P17-20

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Piercy, N. F., and Morgan, N.A., (1997) “The Impact of Lean Thinking and the Lean
Enterprise on Marketing”. Journal of Marketing Management. 13(7) October. P679-
693

Slack, N., Chambers, S., and Johnston, R., (2007) “Operations Management” 5th
Edition. Prentice Hall. GB

Steyn, P.D., and Du Toit, A.S.A., (2010). “Investigating the Potential for the
Development of Just-In-Time Knowledge Management Model”. South African
Journal of Business Management. 41(2) June. P1-12

Womack, J.P., and Jones, D.T., (2005). “Lean Consumption” Harvard Business
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