ANALYSIS ON JUST IN TIME IMPLEMENTATION FOR IMPROVEMENT OF COST EFFICIENCY IN OIL SEAL PRODUCTION PROCESS (A CASE STUDY OF PT. NOK INDONESIA)

Abstract

Preventing and reducing wastage of production costs have been the main focus in mostly automotive manufacturing companies in Indonesia. These trigger companies to compete each other in the market, since automotive industry has become a promising business in Indonesia. The increasing sales of automotive products have led PT. NOK Indonesia as an automotive parts manufacturing company to be ready in competing within its competitors. JIT production method is a management decision in reducing waste occurs during production. The effectiveness of its implementation has become crucial to the increment of profits and firm’s competitive position. A qualitative data analysis was established during the research. A case study was arisen from PT. NOK Indonesia as an automotive parts manufacturing company. JIT production system is implemented in Oil Seal division. The actual system implemented is compared to some theories for analyzing its effectiveness for cost efficiency in the company. Just in Time as one of PIZ components has been effectively implemented by the company. Cell manufacturing, multi skilled employees, elimination of defective products, and selected suppliers based on their ability to provide high quality raw materials in a timely manner have been conducted. In contrast, the implementation has not been effective in term of reducing setup time. According to PIZ which adapts TPS, some requirements have been fulfilled. Heijunka is implemented by using small lot sizes. Oil Seal is produced in one piece flow. Production is based on customers’ orders (Pull System). In ensuring every process passed, the company has set some standardized work. As a supporting tool, Kanban is implemented as the signal to start production. In ensuring the availability of raw materials, a control for purchasing has been designed. In addition, delivery system was designed to support JIT implementation. However, shortcomings still exist. There is no error detection (Jidoka). There is overtime variable in act time calculation. The efficiency is only 96%. Some defects are still created. Safety stock is still available in warehouse. Based on findings, there are some aspects should be improved. Some factors trigger the increasing downtime should be reduced. Improving communication between departments should be increased to reduce delay and routine maintenance shoulbe maintained. In reducing defect products, the company should implement Jidoka system. Shortcomings in 100% efficiency are still tolerable because, they are insignificant. In addition, safety stocks policy is still permitted due to tendency of late delivery caused of traffic jam and employees’ strikes.