A STUDY ON IMPACT OF DIMENSIONS OF JIT ON · PDF fileP rimax International Journal of Commerce and Management Research (A Peer reviewed International Journal) Print ISSN: 2321-3604

Primax International Journal of Commerce and Management Research (A Peer reviewed International Journal)

Print ISSN: 2321-3604 Impact Factor: 3.532 Online ISSN:2321-3612

Vol. No.4 , Issue No.1 April- June 2016 Page 1

A STUDY ON IMPACT OF DIMENSIONS OF JIT ON PERFORMANCE OF AUTOMOBILE MANUFACTURING SECTOR IN CHENNAI

Dr. R. Prabusankar1 Abstract

The ultimate objective of Just-in-Time (JIT) is to enhance flexibility of the whole system, which is one of the competitive factors in future manufacturing and services systems. Automobile manufacturing sector is constantly seeking ways to improve their performance with various industrial tools. Just-in-Time is one of the most leading techniques adopted in automobile industry as to set the standards. The quality supplier, timely transportation supplier, multitasking workers, reduced installation and commissioning, protection pull system, daily production support programmes, low inventory and use of accounting in JIT are the dimensions of JIT in automobile manufacturing sector. There is significant difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector. The quality supplier, timely transportation supplier, multitasking workers, protection pull system, daily production support programmes and use of accounting in JIT have positive and significant impact on performance of automobile manufacturing sector. In order to enhance the performance of automobile manufacturing sector through JIT implementation, it is suggested to audit continuously to prevent deviations and remove the barriers to integration and innovative ideas on performance. Key Words: Automobile Manufacturing, Just-in-Time, Performance

Introduction Just in Time (JIT) is as an extension of the original concept of managing the material flow in a

factory to reduce the inventory levels. In fact, there is much more involved in a manufacturing organization than reducing inventories to control costs. Manufacturing has to deal with other issues, such as process control, level of automation, flexible manufacturing, machine set up times, direct labor productivity, Overhead, supplier management, engineering support, and the quality of product delivered to customers (Gupta, 2012).

The JIT advocates the elimination of waste by simplifying production processes, reductions in set up times, controlling material flows, and emphasizing preventive maintenance are seen as ways by which excess inventories can be reduced or eliminated, and resources utilized more efficiently (Kannan and Tan, 2005). The ultimate objective of JIT is to enhance flexibility of the whole system, which is one of the competitive factors in future manufacturing and services systems.

JIT systems can lead to delivery of ‘perfect’ products or services at the ‘exact’ time they are required (Rhodes, et.al., 2006). In this connection, the main purpose of JIT systems is to identify and to eliminate as many kinds of wastes as possible through improving production activities within a company. A JIT system can be an ‘effective tool’ for assisting a company to reduce cost and then to obtain higher profits

Automobile manufacturing sector is constantly seeking ways to improve their performance with various industrial tools. Just-in-Time is one of the most leading techniques adopted in automobile industry as to set the standards (Chaturvedi, et.al., 2015). Therefore, the present research is attempted to study the impact of dimensions of JIT on performance of automobile manufacturing sector in Chennai. Methodology

Chennai city has been purposively selected for the present study. The 300 employees of automobile manufacturing sector have been selected for the present study by adopting random sampling technique and the data and information pertain to the year 2015-2016. In order to examine the socio-economic characteristics of employees of automobile manufacturing sector, the frequency and percentage

1. Associate Professor, School of Management, Sri Krishna College of Engineering and Technology (Autonomous), Coimbatore.




analysis have been worked out. In order to identify the dimensions of JIT in automobile manufacturing sector, the exploratory factor analysis has been employed. In order to examine the difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector, the ANOVA (Analysis of Variance) has been applied. In order to study the impact of dimensions of JIT on performance of automobile manufacturing sector, the multiple linear regression has been employed. Results and Discussion Socio-Economic Characteristics of Employees of Automobile Manufacturing Sector

The socio-economic characteristics of employees of automobile manufacturing sector were analyzed and the results are presented in Table-1. The results show that about 82.33 per cent of employees are males and the rest of 17.67 per cent of employees are females. It is clear that about 50.67 per cent of employees belong to the age group of 31 – 40 years followed by 41 – 50 years (25.33 per cent), 21 – 30 years (16.00 per cent) and above 50 years (8.00 per cent). The results indicate that 54.67 per cent of employees belong to the monthly income group of Rs.30,001 – Rs.40,000 followed by Rs.40,001 – Rs.50,000 (24.00 per cent), Rs.20,001 – Rs.30,000 (13.67 per cent) and more than Rs.50,000 (7.66 per cent). It is observed that 43.00 per cent of employees have work experience of 6 – 10 years followed by 1- 5 years (21.67 per cent), 11 – 15 years (19.67 per cent) and above 15 years (15.66 per cent). Table-1. Socio-Economic Characteristics of Employees of Automobile Manufacturing Sector

Socio-Economic Profile Frequency Percentage Gender

Male 247 82.33 Female 53 17.67

Age Group 21 – 30 years 48 16.00 31 – 40 years 152 50.67 41 – 50 years 76 25.33 Above 50 years 24 8.00

Monthly Income Rs.20,001 – Rs.30,000 41 13.67 Rs.30,001 – Rs.40,000 164 54.67 Rs.40,001 – Rs.50,000 72 24.00 More than Rs.50,000 23 7.66

Work Experience 1 - 5 years 65 21.67 6 – 10 years 129 43.00 11 – 15 years 59 19.67 Above 15 years 47 15.66

Identification of Dimensions Of JIT In Automobile Manufacturing Sector

In order to identify the dimensions of JIT in automobile manufacturing sector, the exploratory factor analysis has been employed. The principal component method of factor analysis has been carried out with Eigen values greater than one through varimax rotation and the results obtained through rotated component matrix are presented in Table-2. The results of Kaiser-Meyer-Olkin (KMO test) measure of sampling adequacy (KMO = 0.794) and Bartlett’s test of Sphericity (Chi-square value = 612.195; Significance = 0.000) indicates that the factor analysis method is appropriate.




There are eight factors which are extracted accounting for a total of 83.52 per cent of variations on 29

variables. The each of the eight factors contributes to 15.14 per cent, 13.40 per cent, 11.72 per cent, 10.98

per cent, 9.46 per cent, 8.51 per cent, 7.35 per cent and 6.96 per cent respectively.

Table-2. Identification of Dimensions of JIT In Automobile Manufacturing Sector - Exploratory Factor Analysis

Factor Item Rotated Factor

Loadings

Eigen Value

% of Variation

Factor Name

I

We try to establish long-term relationships with our suppliers 0.64

3.41 15.14 Quality Supplier

We have to rely on a limited number of suppliers of quality 0.65

Suppliers we work with , we are actively involved in new product development process

0.70

Quality is the most important criteria in choosing a supplier 0.68

II

Suppliers we work with them we are known for the quality of the product 0.58

3.12 13.40

Timely Transport

ation Supplier

We will establish long-term relationships with our suppliers 0.60

We deliver the goods on time to retailers 0.62

Many of our customers are receiving the cargo area on a daily basis 0.59

III

I have the ability to perform several different tasks 0.58

2.45 11.72 Multitaski

ng Workers

Usually I am starting device 0.60 If a device fails , I get unemployed 0.63 Investigation and output control myself, I do my job 0.61


Loadings

Eigen Value

% of Variation

Factor Name

IV

We set up and installation of machinery, equipment and machinery as we do outside of work time

0.62

2.16 10.98

Reduced Installatio

n and Commissio

ning

We are an attempt to reduce the time to set up and install equipment and machinery

0.56

My colleagues to bring down the startup time and the number of installations and machinery , trains

0.69

Time commissioning and installation 0.61




of equipment and machinery in our factory is low

V

Workers are allowed if found quality problems , to stop production 0.73

1.87 9.46 Protection

Pull System

In order to increase the efficiency of process equipment layout emphasize effective

0.68

Production control in the hands of the workers 0.72

Our quality control system for the purchaser 's request (pull system) , we use

0.67

VI

Usually the daily production rate as production is scheduled 0.71

1.34 8.51

Daily Production Support Programm

es

The end result of quality problems in production lines , production plans are designed to compensate for the backwardness there is a possibility

0.65

In production applications , or the failure to stop the machinery is not considered

0.70


Loadings

Eigen Value

% of Variation

Factor Name

VII

We have a tendency to do so production planning and inventory volume is high

0.57

1.15 7.35 Low Inventory We are very much trying to inventory

the plant down 0.64

Size up of inventory in our factory is stowed 0.59

VIII

We measure time , we use direct labour standards 0.69

1.03 6.96 Use of

Accounting in JIT

We often deviate from the fee will be monitored 0.66

We work order accounting system we use , the way in which costs are determined based on the cost per production packages

0.59

Cumulative % of Variation - - 83.52 - Cronbach’s Alpha - - - 0.87

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. Rotation converged in 11 iterations.




Factor-I: This factor includes: We try to establish long-term relationships with our suppliers (0.64) We have to rely on a limited number of suppliers of quality (0.65) Suppliers we work with , we are actively involved in new product development process (0.70) Quality is the most important criteria in choosing a supplier (0.68) Hence, this factor is named as “Quality Supplier”. Factor-II: is formed with: Suppliers we work with them we are known for the quality of the product (0.58) We will establish long-term relationships with our suppliers (0.60) We deliver the goods on time to retailers (0.62) Many of our customers are receiving the cargo area on a daily basis (0.59) These variables are named as “Timely Transportation Supplier”. Factor-III: This factor includes:

I have the ability to perform several different tasks (0.58) Usually I am starting device (0.60) If a device fails , I get unemployed (0.63) Investigation and output control myself, I do my job (0.61)

These variables are named as “Multitasking Workers”. Factor-IV: This factor is formed with: We set up and installation of machinery, equipment and machinery as we do outside of work time

(0.62) We are an attempt to reduce the time to set up and install equipment and machinery (0.56) My colleagues to bring down the startup time and the number of installations and machinery , trains

(0.69) Time commissioning and installation of equipment and machinery in our factory is low (0.61) This factor is named as “Reduced Installation and Commissioning”. Factor-V: This factor includes: Workers are allowed if found quality problems , to stop production (0.73) In order to increase the efficiency of process equipment layout emphasize effective (0.68) Production control in the hands of the workers (0.72) Our quality control system for the purchaser 's request (pull system) , we use (0.67) Hence, this factor is named as “Protection Pull System”. Factor-VI: is formed with: Usually the daily production rate as production is scheduled (0.71) The end result of quality problems in production lines , production plans are designed to compensate

for the backwardness there is a possibility (0.65) In production applications, or the failure to stop the machinery is not considered (0.70) These variables are named as “Daily Production Support Programmes”. Factor-VII: This factor includes:

We have a tendency to do so production planning and inventory volume is high (0.57) We are very much trying to inventory the plant down (0.64) Size up of inventory in our factory is stowed (0.59)

These variables are named as “Low Inventory”. Factor-VIII: This factor is formed with: We measure time , we use direct labour standards (0.69)




We often deviate from the fee will be monitored (0.66) We work order accounting system we use , the way in which costs are determined based on the cost

per production packages (0.59) This factor is named as “Use of Accounting in JIT”. The Cronbach’s Alpha of the scale was 0.87 indicating that each measure demonstrated acceptable internal consistency. It is inferred that quality supplier, timely transportation supplier, multitasking workers, reduced installation and commissioning, protection pull system, daily production support programmes, low inventory and use of accounting in JIT are the dimensions of JIT in automobile manufacturing sector. Socio-Economic Characteristics Of Employees And Dimensions Of Jit In Automobile Manufacturing Sector In order to examine the difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector, the ANOVA (Analysis of Variance) has been applied and the results are presented inTable-3.

Table-3. Difference between Socio-Economic Characteristics of Employees and Dimensions of JIT

in Automobile Manufacturing Sector Particulars F-Value Sig.

Gender and Dimensions of JIT in Automobile Manufacturing Sector 29.874** .000

Age and Dimensions of JIT in Automobile Manufacturing Sector 31.652** .000 Monthly Income and Dimensions of JIT in Automobile Manufacturing Sector 28.930** .000

Work Experience and Dimensions of JIT in Automobile Manufacturing Sector 30.435** .000

Note: ** Significance at one per cent level

The results indicate that the F-values are significant at one per cent level indicating that there is a significant difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector Hence, the null hypothesis of there is no significant difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector is rejected. Impact Of Dimensions Of Jit On Performance Of Automobile Manufacturing Sector

In order to study the impact of dimensions of JIT on performance of automobile manufacturing sector, the multiple linear regression has been employed and the results are presented in Table-4.The dimensions of JIT derived from exploratory factor analysis are considered as independent variables and the performance is considered as dependent variable.

The results indicate that the coefficient of multiple determination (R2) is 0.71 and adjusted R2 is 0.69 indicating the regression model is good fit. It is inferred that about 69.00 per cent of the variation in dependent variable (Performance) is explained by the independent variables (Dimensions of JIT). The F-value of 23.916 is statistically significant at one per cent level indicating that the model is significant.

Table-4. Impact of Dimensions of JIT on Performance of Automobile Manufacturing Sector Dimensions of JIT Regression Co-

efficient t-value Sig.

Intercept 1.152** 9.740 .000 Quality Supplier (X1) .318** 4.160 .000 Timely Transportation Supplier (X2) .431** 5.548 .000




Multitasking Workers (X3) .587** 5.812 .000 Reduced Installation and Commissioning (X4) .161 1.638 .259 Protection Pull System (X5) .365** 4.827 .000 Daily Production Support Programmes (X6) .271** 3.905 .000 Low Inventory (X7) .127 1.229 .470 Use of Accounting in JIT (X8) .256** 3.764 .000

R2 0.71 - - Adjusted R2 0.69 - -

F 23.916 - .000 N 300 - -

Note: ** Significance at one per cent level

The results show that quality supplier, timely transportation supplier, multitasking workers, protection pull system, daily production support programmes and use of accounting in JIT have positive and significant impact on performance of automobile manufacturing sector at one per cent level. Therefore, the null hypothesis of there is no significant impact of dimensions of JIT on performance of automobile manufacturing sector is rejected. Conclusion

The study reveals that majority of employees of automobile manufacturing sector are males and most of them belong to the age group of 31 – 40 years. Majority of employees belong to the monthly income group of Rs.30,001 – Rs.40,000 and most of them have work experience of 6 – 10 years.

The exploratory factor analysis shows that quality supplier, timely transportation supplier, multitasking workers, reduced installation and commissioning, protection pull system, daily production support programmes, low inventory and use of accounting in JIT are the dimensions of JIT in automobile manufacturing sector. The results indicate that there is significant difference between socio-economic characteristics of employees and dimensions of JIT in automobile manufacturing sector.

The regression analysis indicates that quality supplier, timely transportation supplier, multitasking workers, protection pull system, daily production support programmes and use of accounting in JIT have positive and significant impact on performance of automobile manufacturing sector.

In order to enhance the performance of automobile manufacturing sector through JIT implementation, it is suggested to audit continuously to prevent deviations and remove the barriers to integration and innovative ideas on performance. In addition, resources should be allocated efficiently in order to implement JIT effectively. References Alehi, M., Alipour, M. and Ramazani, M., (2010), “Impact of JIT on Firms’ Financial Performance:

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A STUDY ON IMPACT OF DIMENSIONS OF JIT ON · PDF fileP rimax International Journal of Commerce and Management Research (A Peer reviewed International Journal) Print ISSN: 2321-3604