Internal Milk-run Distribution System

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JIT has an increased amount of so called supermarket concepts. Supermarkets are areas that serve the nearby assembly line with parts (Faccio et al., 2013). Supermarket could be seen as in-house cross docking process where the parts are easier to handle for the picking operators. Supermarkets are a decentralized logistic system that divides parts to smaller boxes to frequently serve the assembly line (Boysen & Fliedner, 2010). If the supermarket frequently delivers small lots of parts it could minimize the storage volume near the assembly line and reduce the longer distance deliveries that are needed in other cases. To receive this fixed schedule and routes for the operators that serve a certain part of the system should be determined. From the supermarket the operators normally use small tow trains to pick the demanded parts and deliver these in appropriate boxes and collect empty boxes to the assembly station. When the deliveries have been made the operators pick up empty boxes and return to the supermarket to refill this and then go back to the assembly station (Faccio et al., 2013).
Point-of-use (PoU) storage is a technique that supports the JIT philosophy which contains the goals of reducing all unnecessary inventories from the factory floor and minimizes non-value adding transportation for the assembly operators (Macmillan J.M, 1993). Normally the PoU materials storage is located close to the production which allows quick access. The material is delivered in bigger batches of parts to a supermarket near the assembly line. Then small batches are being picked up from the supermarket to supply the PoU with materials for maybe just one product (Srinivasan, 2012).


Wastes are the activities that create no value for final product and introduces unnecessary contingency and costs in the material flow. Wastes can be divided into eight different categories depending on where and how the waste is found (Lumsden, 2012).
Overproduction can be described as when a company produces more than the customer demand (Lumsden, 2012). Overproduction is considered to be a waste since unnecessary material is consuming a lot of storage space (Liker & Meier, 2006).
Waiting is waste of spare time spent waiting for necessary conditions (Petersson et al., 2009). Waiting occurs when workers are waiting for the next process step, tools, supply, part, etc. It could also be workers merely serving to watch an automotive machine or having no work because of stock outs, lot processing delays, equipment downtime, and capacity bottlenecks. (Liker, 2004) Excessive Processing implies more work than the customer are demanding or are willing to pay for and are therefore defined as a waste (Petersson et al., 2009). It is due to poor tool and product design, causing unnecessary motions and producing defects.
Unnecessary Movements indicates wasted motions employees are performing such as looking for, reaching for, or stacking parts, tools, etc. Walking is also a significant waste that should be taken into account (Liker, 2004).
Unnecessary Transportation are when carrying work in process (WIP) long distances, creating inefficient transports, or moving material, parts or finished goods into or out of storage or between processes (Liker, 2004). Transportations are a non-value adding process except for transport to the end customer (Petersson et al., 2009).
Excess Inventory can be raw material, WIP, or finished goods causing longer lead times, obsolescence, damaged goods, transportation and storage costs, and delay. Also, extra inventory hides problems such as production imbalances, late deliveries, defects, equipment downtime and long setup times (Liker, 2004).
Defected products are a waste when the product quality is defective which leads to reparations and corrections. Repair, rework, scrap, replacement production, and inspection imply wasteful handling, time, and effort (Liker, 2004).
Unused or Neglected Resources are one of the most common wastes, where the available resources are not utilized or utilized in the wrong way (Lumsden, 2012). This Theoretical Framework also includes when workers’ experience and competency are not utilized (Liker & Meier, 2006).

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1. Introduction 
1.1 Background .
1.2 Problem description
1.3 Purpose and research questions
1.4 Delimitation
1.5 Outline
2. Methodology
2.1 Work Process
2.2 Research approach
2.3 Case study
2.4 Data collection
2.5 Data analysis .
2.6 Reliability & Validity
3. Theoretical framework 
3.1 Framework components
3.2 Lean manufacturing
3.3 Wastes
3.4 5S
3.5 Kaizen
3.6 Standard work
3.7 Material handling .
3.8 Internal Milk-run Distribution System
3.9 Internal logistics principles
3.10 Information Management System
4. Material Supply at the case company
4.1 Case Company .
4.2 Material Supply Overview.
5. Non-value adding activities 
5.1 Value Analysis
5.2 Waste identification .
6. Efficiency improvements 
6.1 Reduction of non-value adding work
7. Discussion and Conclusions 
7.1 Result discussion
7.2 Methodology discussion
7.3 Conclusions
7.4 Further research

Improving Efficiency of the Material Supply in Assembly Line -A case study in the Automotive Industry in Southeast Asia

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