jit vs mrp in the built environment, 94pp

CEBE Working Paper No. 14 1

Learning from Manufacturing: JIT and MRP in Built Environment Education

Abstract: Productivity levels in the manufacturing sector have traditionally been

higher than those in the construction industry. This suggests there are lessons which

building professionals can learn from manufacturing. These lessons should likewise

be extended to classroom teaching so that future cohorts of building professionals

would be aware of continuous organisational learning from the manufacturing sector.

For example, manufacturing has seen how the separate evolution courses of just-in-

time (JIT) principles and the material requirements planning (MRP) concept joined

together to create more advanced systems – the JIT and MRP vertically integrated

hybrid system (VIHS) and horizontally integrated hybrid system (HIHS). Due to the

off-site environment of prefabrication plants in the construction industry, this study

endeavours to bring lessons from the hybrid systems in manufacturing into the

production process of precast concrete plants. The study also describes why the

teaching of JIT principles at the Department of Building, National University of

Singapore, should be extended to encompass the MRP concept.

The study provides a general background of the JIT and MRP systems and presents

two frameworks for the VIHS and HIHS. For VIHS, the MRP system acts as a planner,

while JIT plays the execution role on the shop floor. For HIHS, the first few stages of

the production process work under the control of the MRP concept, while the

remaining stages moving up to the end-users, employ the JIT philosophy. The study

then applies the frameworks of VIHS and HIHS particularly in the context of the

precast concrete plants.

A survey conducted with 30 precasters in Singapore suggests that while JIT principles

have gained popularity among the precasters, the MRP system has been adopted at

a rather slow pace due to a lack of awareness from the precasters. The survey also

reveals that the current and future adoption of JIT and MRP hybrid systems is low and

a majority of the firms surveyed are still unsure if they should adopt a hybrid system.

Hence, the current situation can be changed positively if these firms can be

persuaded to apply the hybrid systems in their production processes, thus reaping the

benefits of higher productivity through learning from the manufacturing industry.

Keywords: Construction Education, Construction Management, Just-In-Time (JIT),

Materials Requirements Planning (MRP)



Table of Contents Chapter 1 Introduction 4 Chapter 2 Just-In-Time Concept 15 Chapter 3 Material Requirements Planning 29 Chapter 4 Integration of JIT and MRP in Manufacturing 39 Chapter 5 Integration of JIT and MRP in Prefabrication Plants 46 Chapter 6 Analysis of Survey Results 57 Chapter 7 Conclusion 68 Acknowledgement 73 References and Further Reading 74 Appendix A 87



List of Figures and Tables

Figure 1: An overview of the goals and building blocks of JIT concept ...........................19 Figure 2: Three categories of waste (man, machine, materials) ......................................21 Figure 3: JIT versus large lot run sizes .............................................................................22 Figure 4: JIT pull system ...................................................................................................25 Figure 5: A two-card Kanban system................................................................................25 Figure 6: Traditional supplier network compared to supplier tiers....................................26 Figure 7: Operation flow using MRP .................................................................................30 Figure 8: Components of MRP..........................................................................................31 Figure 9: A master schedule for end item X…………………………………………………32 Figure 10: A product structure tree for end-item X ...........................................................32 Figure 11: MRP Processing ..............................................................................................33 Figure 12: An overview of MRP II .....................................................................................35 Figure 13: R/3 Application modules ..................................................................................37 Figure 14: General framework of vertically integrated hybrid system (VIHS) ..................40 Figure 15: Example of the use of MRP to counteract long lead times .............................41 Figure 16: Use of MRP system to coordinate JIT shops ..................................................42 Figure 17: Example of HIHS for three-line, five-stage system .........................................44 Figure 18: Typical flow of production process of concrete precast components .............47 Table 1: Major developers of ERP software .....................................................................36 Table 2: Composition of the survey respondents .............................................................57 Table 3: Assessment of JIT supporting goals by precasters in Singapore ......................58 Table 4: Assessment of JIT process design block ...........................................................61 Table 5: Assessment of JIT personnel/organisation block ...............................................62 Table 6: Assessment of JIT manufacturing planning and control block...........................63 Table 7: Comparison of MRP, MRP II and ERP adoption................................................64 Table 8: Willingness to adopt JIT and MRP hybrid systems ............................................66

List of Abbreviations Buildable Design Appraisal System BDAS Building and Construction Authority BCA Construction Quality Assessment System CONQUAS Enterprise Resources Planning ERP Gross Floor Area GFA Horizontally Integrated Hybrid System HIHS Just-in-time JIT Manufacturing Resources Planning MRP II Material Requirements Planning MRP Single Minute Exchange of Die SMED Toyota Production System TPS Vertically Integrated Hybrid System VIHS Work-In-Process WIP



1.0 INTRODUCTION

1.1 Pedagogical Rationale

In the 1990s, Construction and Works typically made up, on average, 46% of Gross Fixed

Capital Formation in Singapore. This undoubtedly showed the important role of the

construction sector in the Singapore economy. However, despite this significance, there

was much concern over the low level of construction productivity as indicated in the 1992

Task Force Report on Construction Productivity, when it was noted that construction

productivity in Singapore was some 53 years behind that of Japan (Lim and Low, 1992). It

was with this background that a flurry of measures was implemented by the Building and

Construction Authority (BCA) to address this problem. The issue was not only confined to

productivity because low productivity can be the trigger for poor quality and safety

standards in the construction industry. The major initiatives introduced by the BCA

included the Buildable Design Appraisal System (BDAS), the Construction Quality

Assessment System (CONQUAS) and the Construction Excellence Awards, among

others. The BDAS and CONQUAS are closely linked in that a project which is more

buildable is also likely to achieve better quality standards more readily. Projects with high

BDAS and CONQUAS scores stand a better chance of winning the coveted Construction

Excellence Awards which in turn, bring with them prestige and financial incentives when

the winners bid for the next project. Developers must also attain a minimum Buildability

Score before their building plans are approved by the authorities in Singapore. The

minimum Buildability Score specified under BDAS would depend on the size and type of

buildings (industrial, commercial, residential, etc.). More details about BDAS and how the

Buildability Score is computed are explained below.

The BDAS formula for computing the Buildability Score was designed to encourage the

use of prefabricated components. The philosophy behind BDAS is to progressively move

construction operations towards a manufacturing-based environment. Productivity in the

manufacturing industry has traditionally been higher than that in the construction industry

for various reasons. Standardisation and repetition, among others, were often cited as the

primary reasons for the high productivity in manufacturing (Lim and Low, 1992). Hence, if

the construction industry progressively moves towards a manufacturing-based platform, it

can also reap the benefit of higher productivity through readily available components and

building materials such as those produced in the prefabrication and ready-mixed concrete

industries.

In other parts of the world, this key concept of linking construction with manufacturing was

recently espoused upon by the Technical Research Centre of Finland through the Open

Building Manufacturing or ManuBuild initiative (Kazi et al., 2007). Eichert and Kazi (2007)

explained that the vision of ManuBuild is open building manufacturing, which is a new



paradigm for building production and procurement by combining highly efficient

manufacturing techniques in factories and on construction sites and an open system for

products and components, offering diversity of supply and building component

configuration opportunities in the open market (Eichert and Kazi, 2007, p 7). Beyond this, it

is also necessary to appreciate and understand the management systems adopted in

manufacturing that have made the industry generally more productive than others. In the

realm of productivity enhancement, a prominent system, the Toyota Production System in

Japan led to the Just-In-Time (JIT) principles being implemented in many factories around

the world. As the construction industry began to appreciate the advantages of borrowing

and learning productivity principles from manufacturing through standardisation and

repetition, it also encouraged the more widespread use of prefabrication technology. This

being the case, the implementation of JIT principles within the construction fraternity has

become more urgent. This is even more so in Singapore where building plans approvals

are regulated through the BDAS which favours prefabrication.

Following these developments in the construction industry, the educational institutions in

Singapore can no longer teach and train building professionals in the traditional methods

of production and procurement. The curriculum structures of tertiary institutions would

need to move in tandem with recent developments in the construction industry in

Singapore with respect to BDAS, prefabrication and JIT management. In this regard, the

Department of Building at the National University of Singapore has risen to the challenge

of incorporating such contemporary management skills in both its undergraduate and

postgraduate students. In the BSc (Project and Facilities Management) programme, the

JIT principles are taught in the module Quality and Productivity. This is also the case in the

MSc (Project Management) programme where JIT principles are included in the module

Project Management. However, during the course of JIT research in the construction

industry in Singapore over the past 15 years, Low and Choong (2001a, b, c) found that JIT

principles may not be applied in their entirety in some organisations because of

understandable constraints. This was particularly evident in the prefabrication industry

where the pull production mode of the JIT system gave way to the push production mode

found in the Material Requirements Planning (MRP) system. This finding seems to suggest

that JIT alone may not provide a complete picture without accounting for MRP within the

larger setting of the construction industry. The integration of JIT and MRP appears to be a

more realistic approach for classroom teaching.

Consequently, while productivity in building-related courses in universities may be taught

using the JIT system, university teachers should also appreciate the prevailing important

industry practices and significant professional practice issues that can influence the

wholesale adoption of JIT principles. University teachers should acknowledge that in

certain settings, it would be more realistic to concurrently supplement the teaching of JIT

principles with appropriate MRP concepts. However, the extent to which JIT and MRP



have been adopted concurrently in the construction industry remains unclear. An analysis

is therefore required to establish the inter-play between JIT and MRP before teachers can

claim to have taught professional practice issues realistically in construction-related

courses in universities. The over-arching purpose of this study is to provide such an

analysis for university teachers to adopt an appropriate pedagogy when teaching such

courses. This analysis will be presented after the Buildable Design Appraisal System is

described below.

1.2 Buildable Design Appraisal System

The BCA in Singapore published a Code of Practice on Buildable Design to explain how

the Buildable Design Appraisal System (BDAS) works (BCA, 2005). Based on the

buildability concept, the Code of Practice seeks to encourage the 3S principles of

Standardisation, Simplicity and Single Integrated Elements to achieve a buildable design.

Standardisation refers to the repetition of grids, sizes of components and connection

details. A repetitive layout, for example, will facilitate faster construction regardless of

whether formwork or precast components are used. Similarly, columns or external

claddings of repetitive sizes will reduce the number of mould changes whether on-site or in

the factory.

Simplicity means uncomplicated building construction systems and installation details. A

flat plate system, for example, reduces formwork construction as well as reinforcement

work considerably. Use of precast components reduces many trade operations on site and

should improve site productivity provided the standardisation principles are observed.

Single Integrated Elements are those elements that combine related components together

into a single element that may be prefabricated in the factory and installed on site. Precast

concrete external walls, curtain walls or prefabricated toilets are good examples of

technologies that fall under this principle.

The BDAS was developed by the BCA as a means to measure the potential impact of the

building design on the usage of site labour. The appraisal system results in a “buildability

score” of the design. A design with a higher buildability score will result in more efficient

labour usage in construction and thus higher site labour productivity. The legislation of

buildable designs took effect on 1 January 2001 in Singapore, following amendments to

the Building Control Act to facilitate the introduction of regulations to enhance the

efficiency and standardisation in designs, processes, construction techniques, products

and materials in the construction industry. The regulations affect new building works as

well as additions and alteration works. With this, a proposed project needs to achieve a

minimum buildability score before its building plans can be approved by the authorities for

construction. New projects (including additions and alterations to existing buildings) with a

Gross Floor Area (GFA) equal to or greater than 2000m2 falls within the legislative



requirements. The minimum score requirement is approximately 60. The minimum

buildability score for mixed developments would be pro-rated according to the GFA of

each type of development.

BCA’s objective in promoting buildability in the construction industry in Singapore seemed

to have been achieved over the years through the BDAS. The average buildability scores

for various categories of new building works have increased over the years and in some

cases, were above the minimum benchmarks stipulated when the legislation first kicked in.

The BDAS looks at the design and computes the extent to which the 3S principles are

found. It covers the structural system and other major components such as the external

and internal walls, doors and windows. Points are awarded based on the types of systems

used. The more buildable the system, the more points are awarded. The points are then

totalled to give the “buildability score” of the design.

The BDAS appraisal system computes the buildable score of a design which covers three

main parts:

1. Structural system

This area of the BDAS examines the different types of structural system that designers

would use. This is effectively divided into four systems in the BDAS. The maximum

buildable score for this system is 50 points. These four systems are:

a) Precast concrete system

b) Structural steel system

c) Cast in-situ system

d) Roof system

2. Wall system

This section of the BDAS garners a maximum of 40 points. The wall system may be one,

or a combination, of the following:

a) Curtain wall

b) Precast concrete wall/panel

c) Precast concrete formwork

d) Precision block wall

e) Traditional brick/RC and plaster wall

f) Cast in-situ wall

g) Cast in-situ wall with prefabricated reinforcements



h) Brickwall.

3. Other design considerations

This section of the BDAS examines the design of the building at a detailed level. Basic

design characteristics, namely standardisation of columns, beams, windows and doors,

structural grids and usage of precast components are considered. The use of these

buildable design features will be awarded with points. In addition, bonus points would be

given for the use of single integrated elements. The maximum buildability score for this

section amounts to 10 points.

The maximum score that can be achieved is 100 points. Different types of systems will be

assigned a different “labour saving index” based on site observations. The labour saving

indices for different construction systems are published in the code. If no labour saving

index is indicated in the code, the BCA will determine the value when required.

The total buildability score for the structure is determined by taking the fraction of the

structure to be constructed by each method, multiplying by the relevant index, summing

the result and multiplying by 50. A similar calculation is performed for the walls (multiplying

the result by 40) and finally the “other features” score (up to a maximum of 10) is added in

and the total cannot exceed 100 (BCA, 2005). The detailed calculations of the scores as

well as the various labour saving indices deployed can be accessed at the following BCA’s

website: http://www.bca.gov.sg/BuildableDesign/others/copbdsep05.pdf.

The principles enunciated in the BDAS are also taught to students in the module

Development Technology and Management, at the Department of Building, National

University of Singapore. It should be added that buildability principles are not articulated in

isolation through the BDAS in this module. Instead, the underlying buildability principles

and BDAS computational modes are taught in relation to productivity, as well as quality as

measured through another assessment system known as the Construction Quality

Assessment System or CONQUAS (CIDB, 1998). There are three modes for teaching

BDAS to students. The first mode is the lecture component where the basic building blocks

of the BDAS, its underlying buildability principles and how these can affect productivity and

CONQUAS scores are taught. The second mode adopts a tutorial format where students

present their findings on how buildability, as measured using the BDAS, can affect the

quality standards of a building through its CONQUAS scores. The third mode, adopting a

tutorial presentation format and/or final year dissertation, requires students to play out how

decisions on certain building criteria can affect the buildability scores as measured through

the BDAS. These building criteria include attributes relating to thermal, acoustics, indoor

air quality, lighting, visual and spatial performance. Students are assessed on the basis of

how their decisions on these building criteria affect the threshold buildability scores. In this



sense, a set of industry evaluation criteria, namely the BDAS and CONQUAS, can lend

itself to evaluating the outcome of student project work.

1.3 Background

Manufacturing has been through a long evolution course for operation strategies. Prior to

the popularity of the computer, inventory was controlled using reorder-point/reorder-

quantity type methods. During the 1960s, in the United States, Joseph Orlicky, Oliver

Wight, and George Plossl together with other researchers developed a new system, which

was called Material Requirements Planning (MRP) (Hopp and Spearman, 2004). After a

slow start, MRP began to gather steam during the 1970s. Orlicky (1975) reported 150

implementations in 1971. By 1981, this number increased to about 8,000 (Wight, 1981). As

it grew in popularity, MRP also grew in scope, and evolved in the 1980s into Manufacturing

Resources Planning (MRP II), which combined MRP with Master Scheduling, Rough-Cut

Capacity Planning, Capacity Requirements Planning, Input/Output control, and other

modules. Hopp and Spearman (2004) highlighted that in 1984 alone, 16 companies sold

US$400 million in MRP II software and by 1989, over US$1.2 billion worth of MRP II

software was sold to American industry, constituting just under one-third of the entire

software industry. By the end of the 1980s, MRP II was developed into a much more

complex system called Enterprise Resources Planning (ERP). ERP contained modules for

all business functions, from accounting and financing functions to marketing and human

resources. As the 1990s drew to a close, ERP was witnessing its employment at a feverish

rate.

While MRP was steadily dominating in the United States, history was taking a different

course in Japan. Several Japanese companies, most notably Toyota, developed the older

reorder-point/reorder-quantity methods to a higher level. Starting from the 1940s, Taiichi

Ohno of Toyota Motors (Japan) began to evolve a system, now known as the “Toyota

Production System” (TPS), which would enable Toyota to compete with their American

rivals. The system was designed to “make goods; as much as possible, in a continuous

flow” (Ohno, 1988). As the success of Toyota Production System become more obvious,

American researchers went to Japan to learn first-hand what was going on, and various

books were written about the system, which was later named as just-in-time in those

books. The first JIT book, published in 1981, was Driving the Productivity Machine:

Production Planning and Control in Japan by Robert W. Hall. This was followed by

Schonberger’s Japanese Manufacturing Techniques: Nine Hidden Lessons in Simplicity in

1982 and Hall’s Zero Inventories in 1983. Not only American professors but also Japanese

professors got on the train of JIT exploration. Shigeo Shingo wrote the Study of Toyota

Production System from the Industrial Engineering Viewpoint in 1981. By 1983, Yasuhiro

Monden published The Toyota Production System: an integrated approach to just-in-time;

and two years later, Shigeo Shingo worked with Andrew P. Dillon on a book about setup



reduction, A Revolution in Manufacturing: the SMED System. Ohno’s book Toyota

Production System: Beyond Large-scale Production finally appeared in English in 1988. In

the same year, Peter J. O’Grady published the Putting the Just-in-time Philosophy into

Practice: A Strategy for Production Managers, which discussed the implementation steps

of JIT in manufacturing. In 1990, a landmark case study conducted by the Massachusetts

Institute of Technology was published in The Machine That Changed the World by

Womack and Jones (1990). This study made a comparison among American, European,

and Japanese manufacturing techniques and concluded that Japanese methods,

particularly those of Toyota, were vastly superior.

In spite of some remarkable individual successes, both MRP and JIT contained their own

weaknesses. O’Grady (1988) pointed out that MRP system had a number of problems

relating to the accuracy of the input, which significantly reduced the effectiveness of many

MRP operations. Besides, MRP does not provide a detailed shop floor schedule, which

makes the role of plant managers a difficult one. On the other hand, JIT has problems with

its requirement for a quite stable demand so as to obtain a level production. This

requirement narrows the option for JIT to be more suitable in repetitive manufacturing,

while MRP is applied mostly in batch production. Companies integrating JIT in their

operation strategies may encounter the risk of low service level due to shortage of

products delivered to customers, since the JIT system does not include a high level of

buffer inventory to meet a sudden rise in demand.

As a nature of the evolution process, manufacturing managers sought for a more effective

system which minimises problems embedding in MRP or JIT alone. One of the options for

a better operation model was the integration of MRP and JIT into an integrated system,

which meant that MRP and JIT could co-exist in one production plant. According to the

argument of various researchers, the two systems could complement each other and

establish an operation system with more varieties of products at a higher productivity level

and higher service level.

This is the broad picture of the current operation strategies for the manufacturing sector.

For the construction sector, the view is not so clear. So far, there have been very few

research studies on the application of MRP in the construction industry. The situation

seems to be better for JIT, since there are numerous studies on how JIT can be employed

to enhance the output of the construction process. However, the potential for the

integration of MRP and JIT applied in the context of the construction industry has not yet

been explored in depth. This study comes into place in the hope to fill the existing gap of

current academic knowledge about MRP and JIT in construction, thus drawing lessons

from the manufacturing sector.



1.4 Literature Review

MRP is not a new philosophy in manufacturing management. A huge number of books,

journal papers, conferences, etc had topics on MRP in manufacturing. However, the

amount of academic research on MRP applied in construction is very limited and Low and

Chan (1997) can be considered as the most noticeable study on this issue. The study

focused on the prefabrication industry in Singapore and indicated that among the firms

surveyed, 29% adopted only the traditional inventory control system for their

manufacturing operations, 50% used a combination of both inventory control system and

MRP, 14% employed MRP II, and only 7% did not adopt any of those above. The

companies who used only the inventory control system maintained a regular demand of

highly standardised precast concrete components. The firms who adopted the combination

of systems tended to use the inventory control system for the more regular demand stock

of highly standardised components while using MRP mainly to plan the production of non-

standardised, customised “one-off” components. The firms who employed MRP II were

amongst the larger firms in the survey sample, who supplied the export markets. The

“systemless” firms were the smallest ones amongst the firms surveyed.

Regarding the application of ERP, Leitch (2003) reported a gloomy picture; five of the top

United Kingdom (UK) construction industry players had initially proposed to spend £100

million on ERP software, but were then hit by a bout of jitters, with four of them putting off

or shelving implementation plans altogether. The main reason for this situation in the UK

was the fear that the hidden costs of installing the ERP system would be enormous. Some

of those hidden costs were already discussed by Leitch (2002).

Lim and Low (1992) wrote one of the earliest books about the application of JIT to boost

productivity in the construction industry. The book concluded that although there are

fundamental differences between the manufacturing and construction industries, it appears

that some of the basic ideas of JIT can be applied, with suitable modifications, to the

construction industry.

Low and Chan (1997) was a further development of Lim and Low’s (1992) work. While Lim

and Low (1992) provided a general overview of the applicability of JIT in construction with

particular emphasis in the area of materials management, Low and Chan (1997) examined

how well the JIT concept could be applied to the “off-site” prefabrication industry whose

nature is almost identical to that of the manufacturing industry.

Choong (2000) found a very interesting inference in which the precasters in Singapore

were able and ready to provide the logistical support for just-in-time deliveries of precast

components to the job-site. However, on the demand side, the contractors were not ready

to embrace the just-in-time system of delivery. Nevertheless, a minority of the contractors

demonstrated mild interest in just-in-time deliveries and hinted that they were willing to



share a little of the potential savings with the precasters through reimbursement of costs in

logistical support.

There was also some other in-depth research on specific aspects of JIT in construction.

Most of these studies concluded that it was possible to apply the techniques of JIT in the

construction industry with some modifications. Tan (1996) focused on the accounting

procedures for material and time waste, to explore quantitative JIT measurements. Tay

(1996) highlighted the role of human resource management in the modified JIT principles

to gain success in eliminating waste. Mok (1998) focused on applying JIT into the site

layout of the construction site to improve productivity and quality. Mok (1998) explained

that by eliminating waste on site, controlling the movement of inventory coming into the

site and within the site, and controlling the usage of mechanised plant and equipment,

smooth work flow could be achieved. Chong (1999) examined whether ISO9000 would

become a guideline and standard which JIT concepts could rely on to impose a smoother

and easier implementation. Ang (1999) attempted to find out the problems that industrial

practitioners encountered while applying JIT system in their construction projects. The

author categorised those problems into industry-related and human related types and

explained how the intensity of the problems could be reduced with some appropriate

measures by various parties. Ang (2002) studied how JIT and 5-S principles might be

integrated for site layout to improve productivity and quality. Show (2004) found out that

the application of JIT principles to ramp-up light factory design would help reduce waiting

time and double handling of goods during transportation; and also provided smooth flow of

delivery to every unit with less damage to the quality of the goods.

The most recent study about JIT in construction was Voo (2006). Voo fostered the

attraction of employing JIT in the construction process by showing the fact that with JIT

embedded in the operation, the interviewed projects could actually achieve construction

cost savings by 20-30% of the total contract value, earlier project completion by half to one

month, and better quality of final building outputs.

Other than separate research on either MRP or JIT, there have been no academic works

officially studying the integration of MRP and JIT which specifically addressed the

construction industry. However, the picture is different for the manufacturing sector. There

were many articles written on the co-existence of the two systems in manufacturing. These

articles can be divided into two main groups. The first group of researchers paid attention

to the vertical integration in which MRP played the role of a planner, while JIT dealt with

the execution task. Some of these studies that should be mentioned are Louis (1989a, b),

Bermudez (1991), Lee (1992), Sillince and Sykes (1993), Titone (1994), Landry et al.

(1997), Pun et al. (1998), and Benton and Shin (1998). The other group of researchers

tended to favour the horizontal integration in which some stages of the production line

could operate under the aura of MRP while the rest of the stages worked with embedded

JIT techniques. The latter group contained the works of Hodgson and Wang (1991a),



Hodgson and Wang (1991b), Hirakawa et al. (1992), Takahashi et al. (1994), Takahashi

and Soshiroda (1996), Pandey and Khokhajaikiat (1996), Wang and Xu (1997), Cochran

and Kim (1998), Beamon and Bermudo (2000), and Geraghty and Heavey (2005).

1.5 Research Objectives

It is without doubt that prefabrication technology brings vast benefits to construction

projects. Within the concrete precast plants, the use of formwork, reinforcement and

concrete can be better controlled, thus wastage is reduced. Close monitoring and better

assurance of the quality of raw materials, together with the use of steel forms, produce

finished products that are of superior quality. The components and their detailing can be

standardised to reap economies of scale. Prefabrication also enables a less labour-

intensive and faster production of building components (Lim and Low, 1992). More than

that, erection of the structure can be easier and quicker using precast components.

However, precast components do offer all the above advantages with a higher price tag. In

order to promote prefabrication technology, precasters need to work effectively to reduce

production costs as much as possible and yet still meet the need for a greater variety of

products. Since the manufacturing sector has always been a leading sector as far as

operation strategies are concerned, efforts have been poured in to duplicate what has

been successfully done in manufacturing and bring these to the construction industry.

Due to a quite similar environment with a typical manufacturing plant, “off-site”

prefabrication plants seem to be the most convenient starting point to bring in the concepts

of operation strategies which are not so new in the manufacturing but have not yet been

disseminated in the construction sector (Low and Chan, 1997). The purpose of this study

is:

a) To examine the extent to which the concrete precasters in Singapore have applied

the concept of JIT in their production plants.

b) To understand what are the major problems which precasters need to consider when

applying JIT in their operation strategies.

c) To examine the current adoption of MRP, MRP II and ERP in the concrete

precasters’ plants.

d) To understand what are the major problems which precasters encounter while

adopting MRP, MRP II and ERP or what are the main reasons why they choose not

to adopt any of those.

e) To study the feasibility of applying both JIT and MRP in the precasters’ production

plants.



f) To recognise whether vertical integration or horizontal integration has more potential

to penetrate into the construction industry.

1.6 Scope and Focus of Research

This study focuses on the first part of the supply chain where the precasters work with

different raw materials suppliers to produce the precast components ordered by main

contractors. The research examines how JIT and MRP can cooperate in an integrated

system to raise the production efficiency. The research hypothesis has been formulated as

follows:

“JIT and MRP both have their own strengths and weaknesses. When they work

together, they would complement each other and further enhance the effectiveness

of the prefabrication plants producing precast concrete components.”

The research starts with a study of books, journal papers, unpublished dissertations, and

other reports relating to JIT, MRP and integration of JIT and MRP in both the

manufacturing and construction sector. A comprehensive summary of relevant concepts

and techniques is then presented. An analysis of the questionnaire results of the survey of

precasters in Singapore follows to gain deeper insight into the current adoption of JIT and

MRP in the local context and the research hypothesis is tested using findings from the

survey. The study is concluded with some discussion about the limitations of the research

and suggestion for the direction of future work.



2.0 JUST-IN-TIME CONCEPT

2.1 JIT Overview

Development of the JIT concept

Historically, in some respects, the just-in-time (JIT) techniques were already

operationalised during the late 1920s at Henry Ford’s great industrial complex in River

Rouge, Michigan as he streamlined his moving assembly lines to make automobiles. In My

life and Work, Henry Ford wrote:

We have found in buying materials that it is not worth while to buy for other than

immediate needs. We buy only enough to fit into the plan of production… If

transportation were perfect and an even flow of materials could be assured, it

would not be necessary to carry any stock whatsoever (1922, p 56).

However, JIT did not officially embark in its revolutionary track until the Toyota Motor

Company of Japan paid attention to Ford’s operation techniques and based its production

system on what it saw. Toyota learned a great deal from studying how Ford’s plant

operated and was even able to accomplish something that Ford could not: a system that

could handle variety (Stevenson, 2005).

The JIT approach started to be developed at Toyota by Taiichi Ohno, its vice president of

manufacturing, and several of his colleagues since 1940s. At that time it was called the

Toyota Production System (TPS). The system gradually evolved and became a success

during the 1980s when Toyota created impressively high quality, yet lower priced cars

compared to their American rivals. The development of JIT in Japan was probably

influenced by Japan being a crowded country with few natural resources (Lim and Low,

1992). Not surprisingly, the Japanese are very sensitive to waste and inefficiency. They

regard scrap and rework as waste and excess inventory as an evil because it takes up

space and ties up resources.

Lehner (1981) highlighted that much of the TPS originated in the late 1940s and early

1950s, when Toyota was producing exclusively for a domestic market that was not very

strong. The company had been operating on the conventional assumption that it was most

efficient to produce in large lots, “but that kind of thinking has pushed us close to

bankruptcy, because the large lots we were producing couldn’t be sold”, said Toyota’s

president Mr. Fuji Cho (Lehner, 1981). Toyota couldn’t lay off workers – Japan’s a “life-

time” employment system – so Toyota executives hit upon the simple yet radical idea that

still pervades its operations: overproduction is waste. Based upon that, Toyota refined its

production system and perfected the JIT concept.



As the victory of JIT became undeniable, quality experts W. E. Deming and J. M. Juran

lectured on the need for American producers to adopt many JIT principles from their

Japanese competitors (Chase et al. 2006).

JIT Strategic Concept – Little JIT versus Big JIT

Taiichi Ohno, founder of the JIT concept, defined JIT as follows:

Just-in-time means that, in a flow process, the right parts needed in assembly

reach the assembly line at the time they are needed and only in the amount

needed (1988, p 4).

Schonberger, an American scholar on operation management, shared the same standpoint

as Taiichi Ohno when he referred to JIT as a system which:

produce and deliver finished goods just in time to be sold, sub-assemblies just in

time to be assembled into finished goods, fabricated parts just in time to go into

sub-assemblies and purchased materials just in time to be transformed into

fabricated parts (Schonberger, 1982).

As it can be seen from the above definitions, initially the term JIT merely referred to the

movement of raw materials, work-in-process and finished goods within a production

system. However over time, the scope of JIT broadened and the term became associated

with lean production. In order to distinguish this difference in terms of the operational

hierarchy, the JIT concept is classified into “little JIT” and “big JIT”. “Little JIT” is simply a

scheduling production system which focuses more narrowly on scheduling goods,

inventories and providing service resources where and when needed. The main purpose

of “little JIT” is to reduce the level of required inventories. “Big JIT” (now often mentioned

interchangeably as lean production) refers to a highly coordinated, repetitive

manufacturing or services system designed to produce a high volume of output with fewer

resources than traditional repetitive system, but with the ability to accommodate more

variety than the traditional system (Chase et al., 2006). “Big JIT” represents a total

corporate philosophy which encompasses every aspect of the process, from design to

after the sale of a product; from materials and inventories management to vendor

relationships, human resources, technology management, etc. (Lim and Low, 1992). The

philosophy is to pursue a system that functions well with minimal levels of inventories,

minimal waste, minimal space, and minimal transactions: truly, a lean system. As such, it

must be a system that is not prone to disruptions and is flexible in terms of the product

variety and range of volume that it can handle (Stevenson, 2005).



JIT Tactical Framework

The JIT concept has been scrutinised by world-wide researchers and practitioners for

decades. After hundreds of studies and books on JIT, the manufacturing world seems to

agree upon the macro strategic level of JIT, yet at the lower level, there has been no

universal tactical framework of what exact principles and techniques JIT comprises

(Fullerton et al., 2003). Lim and Low (1992) presented that “there is no one way of

conceptualizing and classifying the principles of JIT”, the same as Zipkin’s statement

“asking any two managers what JIT does will get you two different answers” (Zipkin, 1991).

This inability to explain systematically and theoretically JIT manufacturing methods may be

due to JIT’s emphasis on practice and implementation (Monden, 1983).

Each researcher provided a different set of guidelines on what principles were included in

the JIT concept (Spencer and Guide, 1995). Shigeo Shingo (1981) started with eleven

technical points to consider when deploying JIT in a plant:

1) Non-cost principle;

2) First pillar of elimination of wastes is “non-stock”;

3) Development to one piece flow operation;

4) Shortening time of exchange dies and toolings using single minute exchange of die

(SMED) system;

5) Elimination of breakdown and defects;

6) Unification of load adjustment and non-stock;

7) Development of overall integrated one piece flow operation;

8) Second pillar of elimination of wastes is “reduction of man-hours”;

9) Development to “brainwork” converted to automation;

10) Maintenance and development of standard operation; and

11) Development of “Kanban” system.

Schonberger (1982) presented nine lessons to learn from Japanese manufacturing:

1) Management technology is a highly transportable commodity;

2) Just-in-time production exposes problems otherwise hidden by excess inventories

and staff;

3) Quality begins with production, and requires a company-wide "habit of

improvement”;

4) Culture is no obstacle; techniques can change behaviour;

5) Simplify, and goods will flow like water;



6) Flexibility opens doors;

7) Travel light and make numerous trips — like the water beetle;

8) More self-improvement, fewer programmes, less specialist intervention; and

9) Simplicity is the natural state.

Monden (1983) asserted that TPS included eight principles:

1) Kanban system to maintain JIT production;

2) Production smoothing to adapt to demand changes;

3) Shortening of the setup time for reducing the production lead time;

4) Standardisation of operations to attain line balancing;

5) Process layout and “multi-functional workers” for the flexible work force concept;

6) Improvement activities by small groups and suggestion system (quality control

circle) to reduce the work force and increase worker ;

7) “Visual control system” (Andon) to achieve autonomation concept; and

8) “Functional management system” to promote company-wide quality control.

Taiichi Ohno (1988) provided no clear framework but rather a collection of various

techniques that were practised at Toyota plants, such as cost reduction via elimination of

wastes, kanban system, autonomation, emphasis on teamwork instead of individual work

assignment, production levelling, small lot sizes, and quick setup. O’Grady (1988) came up

with four main pillars of the JIT philosophy, attack fundamental problems; eliminate waste;

strive for simplicity; and devise systems to identify problems.

Low and Chan (1997) reckoned eight distinctive features and broad principles were

embedded in the JIT concept:

1) Attacking fundamental problems;

2) Elimination of waste;

3) The “Kanban” or “Pull” system;

4) Uninterrupted work flow;

5) Total quality control concept;

6) Top management commitment and employee involvement;

7) Supplier and client relations; and

8) Continuous improvements.



Source: Vollmann, T. E. et al. (2005)

Vollmann et al. (2005) put forward the overview of the goals and building blocks of JIT

concept as following:

Figure 1: An overview of the goals and building blocks of JIT concept

2.2 JIT Goals

The framework suggested by Vollmann et al. (2005) indicates that the ultimate goal of JIT

is a balanced system, that is, one that achieves a smooth, rapid flow of materials and/or

work through the system. The idea is to make the process time as short as possible by

using resources in the best possible way. The degree to which the overall goal is achieved

depends on how well certain supporting goals are accomplished (Stevenson, 2005).

Disruptions have negative effects on the whole system by hindering the smooth flow of

products; therefore it is inevitable to set elimination of disruptions as one of the supporting

goals. The sources of disruptions may originate from poor quality, equipment breakdowns,

changes to schedule, and late deliveries. As long as these potential sources of problems are



catered for, the uncertainty that the system must deal with will be reduced and there will be

a better chance that the targeted “balanced, rapid flow” will happen.

A flexible system is the one that is robust enough to handle a mix of products, often on a

daily basis, and to handle changes in the level of output while still maintaining balance and

throughput speed. This enables the system to deal with some uncertainty. In other words,

a flexible system is a means to keep the ultimate goal practically feasible. To facilitate the

flexibility of the system, reduction of setup and lead times is critical.

The last but not least supporting goal of JIT is to eliminate waste. Waste can be defined as

anything other than the minimum amount of resources which are absolutely essential to

add value to the product (Rawabbdeh, 2005). It represents the unproductive resources,

thus a systematic and continuous identification and elimination of waste can free up

resources and lead to increased efficiency, improved productivity and enhanced

competitiveness. Generally, companies that work towards the elimination of waste in their

manufacturing processes realise the following benefits: lower raw material stock, work-in-

process and finished goods inventories which reduce the associated holding cost; higher

levels of product quality; increased flexibility and ability to meet customer demands; lower

overall manufacturing costs; and increased employees’ involvement (Chase et al., 2006).

Reduction of all non-productive activities eventually saves time and allows more resources

to be allocated to improving throughput and profitability.

From a practical perspective, Shigeo Shingo (1981) classified waste into seven types:

1) Waste from overproducing - involves excessive use of manufacturing resources

due to producing more than enough for the fear of shortage;

2) Waste of waiting time – requires additional space, delays the work;

3) Transportation waste – increases material handling due to temporarily re-arranging

and moving inventories;

4) Processing waste – makes unnecessary production steps, scrap;

5) Inventory (raw material, work-in-process and finished goods) waste – adds cost to

production due to extra handling, extra space, extra interest charges and so on;

6) Waste of motion – involves unnecessary picking and placing or any wasteful

movement due to the unreasonable process design and layout;

7) Waste from product defects – requires rework costs and leads to possible lost sales

due to customer dissatisfaction.

According to Rawabbdeh (2005), the seven types of waste can then be categorised into

three main groups related to: man, machine and material by means of activities or

conditions that affect the fourth, namely, money. The man-group contains the waste of



Source: Rawabbdeh, I. A. (2005).

waiting, motion, and overproduction; the machine-group contains over-processing waste;

and the material-group contains transportation, inventory and defects waste. However,

man and material overlap in overproduction waste, whilst machine and material overlap in

defect waste. Figure 2 shows this classification.

Figure 2: Three categories of waste (man, machine, materials)

2.3 Building Blocks of JIT Concept

Product Design

Standard parts: The use of standard parts means that workers have fewer parts to deal

with, and training time and cost are reduced. Purchasing, handling, and checking quality

become more routine and lend themselves to continual improvement. Another important

benefit is the capability to use standard processing.

Modular design: Modular design is an extension of standard parts. It is a form of

standardisation in which component parts are grouped into modules that are easily replaced

or interchanged. Instead of dealing with numerous individual parts, workers only need to

work on a handful of modules. This greatly simplifies assembly, purchasing, handling,

training, and so on.

Quality built in: JIT lays stress on high quality products due to the fact that poor quality

creates delay or idles on the system if defects are found and rectification work is needed. In

order to reach and maintain a high standard of quality, considerations in quality

improvement and quality assurance are designed into the product and the production

process at the design or conceptualisation stage. The earlier the quality is built into the

product or process, the wider the cost of design quality can be spread over units; and the

deeper the benefits can travel within the organisation.



Source: Stevenson, W. J. (2005)

Concurrent engineering: This means bringing engineering designer and manufacturing

personnel together early in the design stage in order to grab the expertise of the

manufacturing personnel, and ensure the technical feasibility and cost-efficiency of the

products. It also results in a major shortening of the product development process, which

could be a key competitive edge. This concept further develops the “quality built in” idea.

Process Design

Small lot sizes: Small lot sizes in both the production process and deliveries from

suppliers yield a number of benefits that enable the JIT system to operate effectively.

Figure 3: JIT versus large lot run sizes

Firstly, with small lots moving through the system, in-process inventory is considerably

less than it is with large lots. This reduces carrying costs, space requirements, and clutter

in the workplace. Secondly, inspection and rework costs are less when problems with

quality occur because there are fewer items in a lot to inspect and rework. Thirdly, small

lots permit greater flexibility in scheduling. As described in Figure 3, using small lots, a JIT

system would frequently shift from producing A to producing B and C on a daily basis,

instead of long production runs of each product, one after another (Stevenson, 2005). This

flexibility enables the JIT system to respond more rapidly to change in customer demands

for output: JIT can produce just what is needed, when it is needed.

Setup time reduction: Small lots and changing product mixes require frequent setups.

Unless these are quick and relatively inexpensive, the time and cost to accomplish them

can be prohibitive. Moreover, long setup time requires holding more inventory than with a

short setup time. Hence, deliberate effort is required to reduce setup time; and workers are

usually a valuable part of the process. In addition to training workers to do their own setup

with simple and standardised procedures, multi-purposed equipment or attachments can

also help to reduce job changeover time. Group technology (the grouping into part families

of items with similar design or manufacturing characteristics) can add on the setup cost

and time reduction by capitalising on similarities in recurring operations. For instance,



parts that are similar in shape, materials, and so on, may require very similar setups.

Processing them in sequence on the same equipment can reduce the need to completely

change a setup; only minor adjustments may be necessary.

Manufacturing cells: JIT contains multiple manufacturing cells, which are groups of

closely located workstations dedicated to the production of a limited number of similar

parts. The cells contain the machine and tools needed to process families of parts having

similar processing requirements. Among the important benefits of manufacturing cells are

reduced changeover times, high utilisation of equipment, and ease of cross-training

operators.

Lower level of inventory: This includes all three types of inventory: raw materials stock,

work-in-process inventories, and finished goods. Without distinction of type, inventories

are buffers that tend to “keep problems hidden from view” (O’Grady, 1988), make

problems become less obvious and less serious and eventually remain unsolved. It is also

a tremendous burden in cost and space to carry excessive inventory. The JIT approach is

to pare down inventories gradually in order to uncover problems.

Quality improvement: Quality improvement focuses on never-ending finding and

eliminating the causes of problems. One useful mechanism used by the JIT system to

achieve quality improvement is “autonomation” (or “jidoka” in Japanese). According to

Monden (1983) Jidoka automatically detects defects during production using foolproof

instruments, then stops the production line to correct the cause of the defects. The halting

of production forces immediate attention to the problem; investigation is conducted, and

corrective action is taken. Consequently, quality is continuously improved.

Production flexibility: JIT applies various techniques to reduce bottle-necks, and

increase production flexibility. Knod and Schonberger (2001) suggested some guidelines

for increasing production flexibility by using small lot sizes, reducing setup time, employing

preventive maintenance, cross-training workers, using small units of capacity, and so on.

Personnel/Organisational Elements

Workers as assets: Instead of treating workers as a production cost, JIT empowers

workers with more authority to make decisions than their counterparts in the traditional

system. Well-trained and motivated workers are the heart of a JIT system.

Cross-trained workers: Workers are cross-trained to perform several parts of a process

and operate a variety of machines. This adds to system flexibility because workers are

able to help one another when bottle-necks occur or when a co-worker is absent. It also

eases the scheduling issue due to less constraint in the workers’ capabilities.

Continuous improvement: Workers in a JIT system have greater responsibility for quality

than workers in traditional systems, and they are expected to be involved in non-stop



problem solving. The intent is to continually identify and eliminate the problem, or at least

greatly reduce the chances of it recurring. Some companies in Japan use “andon” – a

system of lights used at each workstation to signal problems or slowdowns. Each

workstation is equipped with a set of three lights. A green light means no problems, an

amber light means a worker is falling a little bit behind, and a red light indicates a serious

problem. The purpose of the light system is to keep others in the system informed and to

enable workers and supervisors to immediately see when and where problems are

occurring.

Not only workers but also all levels of management are encouraged to actively support and

become involved in problem solving to achieve continuous improvement or “kaizen” in

Japanese term.

Cost accounting: Traditional accounting methods sometimes distort overhead allocation

because they allocate it on the basis of direct labour hours. While labour cost does not

constitute all production cost, other costs need to be taken into account. Thus, JIT applies

activity-based costing, which allocates overhead to specific jobs based on their

percentages of activities.

Leadership/project management: In JIT, managers are expected to be leaders and

facilitators, not order givers. JIT encourages two-way communication, and a high level of

support and commitment from managers.

Manufacturing Planning and Control

Level loading: JIT places strong emphasis on achieving stable, level daily-mix schedules.

Toward that end, the master production schedule is developed to provide level capacity

loading. Once established, the production schedules are relatively fixed over a short time

horizon to provide certainty to the system; and daily adjustments are strictly controlled by

the pull system with Kanban cards and other visual systems.

Pull system: In traditional production environments, a “push system” is used: work is

pushed to the next station as it is completed without considering whether the next station

is ready to take the parts from the previous station. Consequently, work may pile up at the

workstations that fall behind schedule.

In contrast, JIT deploys “pull system”, which is defined by Taiichi Ohno (1988, p. 14) as

below:

Manufacturers and workplaces can no longer base production on desktop

planning alone and then distribute, or push, them onto the market. It has become

a matter of course for customers, or users, each with a different value system, to

stand in the front line of the marketplace and, so to speak, pull the goods they

need, in the amount and at the time they need



Source: Hopp, W.J., and Spearman, M.L. (2004)

In other words, JIT communication moves backwards; each workstation or customer

communicates its need to the preceding work station or supplier (see Figure 4).

Figure 4: JIT pull system

Work moves “just in time” to the next station based on the demand pulled by the next

station; stocks do not pile up at the warehouses and wait to be sold but rather are

produced on the basis of customer demand (Hopp and Spearman, 2004).

Visual systems – Kanban Cards: There are various ways to communicate demand for

work or materials from the preceding station, but so far the “Kanban cards” system is the

most effective. Figure 5 shows how a two-card Kanban system works.

Figure 5: A two-card Kanban system

The move cards authorise the workers from the next station coming to the previous station

to take the parts needed for his work. The production cards are a signal for the worker at

the previous station to start to produce in response to the demand of the next station. A

two-card can become a one-card Kanban system if the card is used to serve both

Each stage of the system is tightly linked. Material is pulled through the system only when there is demand. Sub = Subassembly

Fab = Fabrication

Source: Chase et al., 2006




purposes of moving and producing material. By controlling the number of Kanban cards

available, managers can loosen or tighten the amount of inventory (Hopp and Spearman,

2004).

Close vendor relationships: The JIT system typically has close relationships with

vendors or suppliers, who are expected to provide frequent small deliveries of high-quality

goods. The burden of ensuring quality shifts to the vendor in the sense that vendors can

be relied on to deliver high-quality goods without the need for buyer inspection.

Furthermore, instead of dealing with numerous suppliers as in the traditional system, JIT

employs a tiered approach for suppliers as represented in Figure 6.

Figure 6: Traditional supplier network compared to supplier tiers

The “team of suppliers” in the tiered approach reduces significantly the complexity of the

procurement methods. Each supplier bears full responsibility for the quality of its portion of

the product.

Reduced transaction processing: Unnecessarily excessive transactions are a cost

burden for any organisation. The JIT system cuts transactions costs by reducing the

number and the frequency of transactions. Some practices can be direct deliveries of

goods from suppliers to production floor which bypasses the warehouse entirely,

trustworthily high quality material from suppliers which eliminates the need for buyer’s

inspection, use of bar coding, etc.

Preventive maintenance and housekeeping: Preventive maintenance is a proactive

approach which maintains equipment in good operating condition and replaces parts that

have a tendency to fail before they actually do fail. The goal is to reduce the incidence of

breakdowns or failures.



Housekeeping means maintaining a workplace that is clean and free of unnecessary

materials, because those materials take up space and may cause disruptions to the work

flow. The JIT system often links housekeeping with the 5-S principles. According to

Monden (1983), 5-S represents the Japanese words Seiri (clearly separating necessary

things from unnecessary ones and abandoning the later), Seiton (neatly arranging things

in order for ease of use), Seison (continually maintaining cleanliness), Seiketsu

(standardising cleanup activities to make these actions specific and easy to perform) , and

Shitsuke (encouraging discipline among workers)

2.4 JIT II

Atkinson (2001) pointed out that in some companies - such as IBM, Motorola, Siemens

and Sun Microsystems, - the JIT concept grows into JIT II where a supplier representative

works in the company’s plants, making sure that there is an appropriate supply on hand.

The rationale for JIT II is that suppliers have more expertise on the parts they supply than

their customers do, hence they can manage their parts better and also can provide some

beneficial suggestions to improve the production process.

2.5 Benefits of JIT and Transition to a JIT System

A recent study of the average benefits accrued to US manufacturers from implementing

JIT showed some impressive figures: 90% reduction in manufacturing cycle time, 70%

reduction in inventory, 50% reduction in labour costs and 80% reduction in space

requirement (Russell and Taylor, 2006). Salaheldin (2005) researched on the JIT

implementation in Egyptian manufacturing firms and also found plentiful attractive benefits

such as improved quality; lower costs; better connection with workers and suppliers;

maximised use of space; full utilisation of people, equipment, materials and parts; and

improved competition while reducing paper work. Thus, there is no doubt about the

positive effects of JIT on the operation of the firms.

However, in order to reap the benefits of JIT, companies needed to adopt a carefully

planned approach to increase the probability of successful transition from the traditional

system to the JIT system:

1) Make sure that top management is committed to the conversion. Make sure they

are involved in the process and know what it will cost, how long it will take to

complete the transition, and what results can be expected.

2) Obtain the support and cooperation of workers.

3) Begin by trying to reduce setup time and reduce inventories. Identify and eliminate

emerging problems.



4) Gradually convert operations, beginning at the end of the process and working

backward. At each stage, make sure the conversion has been relatively successful

before moving on.

5) As one of the last steps, obtain support and cooperation of suppliers, convert

suppliers to JIT and be prepared to work closely with them.

Managers need to know beforehand that converting from a traditional system to a JIT

system may not be a smooth process and it requires a lot of effort to be poured in.

O’Grady (1988) even listed down nine potential pitfalls that may result in the failure of JIT

implementation. Hence, firms with the ambition to reach the summit of the JIT mountain

must prepare to counter-attack all the obstacles to conversion.



3.0 MATERIAL REQUIREMENTS PLANNING

3.1 MRP Overview

MRP concept

The earliest mechanism used to manage inventory was the reorder-point/reorder-quantity

system. Under the reorder-point system, the depletion in the supply of each inventory item

was monitored and a replenishment order was issued whenever the supply dropped to a

predetermined quantity – the reorder point (Orlicky, 1975). This system suffered from two

main difficulties. One was the enormous task of setting up schedules, keeping track of

large numbers of parts and components, and coping with schedule and order changes.

The other was a lack of differentiation between independent demand (end-items or

finished goods) and dependent demand (raw materials, subassemblies, components)

(Stevenson, 2005).

During the 1960s in the United States, led by computer manufacturers - in particular, IBM

– there was a wave of widespread use of computers in business. As a result, a new

manufacturing planning and control system called material requirements planning (MRP)

was disseminated among American manufacturers. Joseph Orlicky, one of the major MRP

innovators, defined MRP as following:

A material requirements planning (MRP) system, narrowly defined, consists of a

set of logically related procedures, decision rules, and records (alternatively,

records may be viewed as inputs to the system) designed to translate a master

production schedule into time-phased net requirements, and the planned

coverage of such requirements, for each component inventory item needed to

implement this schedule (1975, p 21).

In other words, MRP is a “computer-based information system that translates master

schedule requirements for end items into time-phased requirements for sub-assemblies,

components, and raw materials” (Stevenson, 2005, p 576). It works backward from the

due date using lead time and other information to determine when and how much to order.

The main purposes of a basic MRP system are to control inventory levels, assign

operating priorities for items, and plan capacity to load the production system (Chase et al.

2006).

MRP Position in Relation to Other Functions

MRP is not a stand-alone system. It rather coordinates with other activities of the operation

process in order to foster strength of the planning and controlling function. Figure 7

demonstrates how MRP fits into the flow of the other operational activities.



Figure 7: Operation flow using MRP

As can be seen from Figure 7, based on the master production schedule which specifies

the production requirements for each end-item, MRP calculates the requirements

schedules for dependant items - raw materials, subassemblies and components - which

are needed in order to produce the required quantity of each end-item. Without the input

from the master production schedule, MRP could not operate; and without another

extended step which is "detailed capacity requirements planning", MRP output could not

be validated and used to determine the dependent demands.

Source: Author of this study

Master schedule (Demand for specific end-items)



Components of MRP

The components of MRP are presented in Figure 8.

Figure 8: Components of MRP

The primary inputs of MRP are a bill of materials, which details the composition of a

finished product; a master schedule, which details how much finished product is desired

and when; and an inventory records file, which details how much inventory is on hand or

on order. The planner processes this information to determine the net requirements for

each period of the planning horizon. Outputs from the process include planned-order

schedules, order releases, changes, performance-control reports, planning reports, and

exception reports (Stevenson, 2005).

3.2 MRP Input

The Master Schedule

The master schedule is one of three primary inputs in MRP stating which end-items are to

be produced, when these are needed, and in what quantities. Normally, the master

schedule is formed after disaggregating the aggregate planning which consists of demand

for groups of end-items. Based on the customer orders, forecasts, and orders from




warehouses to build up seasonal inventories, the demand for each particular end-item

within the groups is specified. Figure 9 illustrates what a master schedule looks like.

Figure 9: A master schedule for end item X

The master schedule separates the planning horizon into a series of time periods or time

buckets, which are often expressed in weeks. However, the time buckets need not be of

equal length. In fact, the near-term portion of a master schedule may be in weeks, but later

portions may be in months or quarters. Usually, plans for those more distant time periods

are more tentative than near-term requirements (Stevenson, 2005).

Although a master production schedule has no set time period, it is important that the

master schedule covers the stacked or cumulative lead time (the sum of the lead times

that sequential phases of a process require, from ordering of parts or raw materials to

completion of final assembly).

The Bill of Materials

A bill of materials contains a listing of all of the assemblies, subassemblies, parts, and raw

materials that are needed to produce one unit of a finished product. A product structure

tree is useful in illustrating how the bill of materials is used to determine the quantities of

each of the ingredients (requirements) needed to obtain a desired number of end items:

Figure 10: A product structure tree for end-item X

In Figure 10, end-item X is composed of two As and one B. Each A requires three Cs and

one D; while each B requires one D and two Es. Similarly, each C is made up of one F.

These requirements are listed by level, beginning with 0 for the end item, then 1 for the

Week number Item: X 1 2 3 4 5 6 7 8 Quantity 700 900

X

A(2) B

C(3) D D E(2)

F

Level 0

1

2

3



next level, and so on. The items at each level are components of the next level up and, as

in a family tree, are parents of their respective components.

The Inventory Records

Inventory records include information on the status of each item by time period or time

buckets. This contains gross requirements, scheduled receipts, and expected amount on

hand. It also includes other details for each item, such as supplier, lead time, and lot size

policy. Changes due to stock receipts and withdrawals, cancelled orders, and similar

events are also recorded in this file (Stevenson, 2005).

3.3 MRP Processing

MRP processing takes the end-item requirements specified by the master schedule and

"explodes" them into time-phased requirements for assemblies, parts and raw materials

using the bill of materials offset by lead times. The determination of the net requirements is

the core of MRP processing.

Figure 11: MRP Processing

Gross requirements are the total expected demands for an item or raw material during

each time period. These quantities are derived from the master production schedule or the

planned-order releases of their immediate "parents".

Scheduled receipts are open orders (orders that have been placed) and are scheduled to

arrive from vendors or elsewhere in the pipeline by the beginning of a period.

Projected on hand are the expected amounts of inventory that will be on hand at the

beginning of each time period: scheduled receipts plus available inventory from last period.

Net requirements are the actual amount needed in each time period. In addition to

subtracting projected inventory on hand from gross requirements, net requirements are

sometimes adjusted to include safety stock and an allowance for waste.



Planned-order receipts are the quantities expected to be received by the beginning of the

period. Under lot-for-lot ordering (lot size = 1), this quantity will equal net requirements.

Under lot-size ordering, the order size must be in multiples of the lot size, thus this may

exceed net requirements. Any excess is added to available inventory in the next time

period.

Planned-order releases are the planned amount to order in each time period; equal

planned-order receipts offset by lead times. This amount generates gross requirements at

the next level in the assembly or production chain. When an order is executed, it is

removed from "planned-order releases" and entered under "scheduled receipts".

As time passes, the plans need to be updated and revised to reflect the moving horizon over

time since old orders will have been completed while new orders enter; also there may have

been some changes in quantities, delays, missed deliveries, and so on. Orlicky (1975)

suggested that MRP records could be updated using either the regenerative system

(approach that updates MRP records periodically) or net-change system (approach that

updates MRP records continuously).

3.4 MRP Output

The MRP system has the ability to provide management with a fairly broad range of

outputs. These are often classified as primary reports, which are the main reports, and

secondary reports, which are optional outputs.

Primary reports 1) Planned orders: indicating the amount and timing of future orders.

2) Order releases: authorising the execution of planned orders.

3) Changes: Revising planned orders, including changes of due dates or order

quantities and cancellations of orders.

Secondary reports

1) Performance-control reports: evaluating the system operation by measuring

deviations from plans, including missed deliveries and stockouts, and by providing

information that can be used to assess cost performance.

2) Planning reports: including purchase commitments and other data that can be used

to assess future material requirements.

3) Exception reports: calling attention to major discrepancies such as late or overdue

orders, excessive scrap rates, reporting errors, and requirements for nonexistent

parts.



The wide range of outputs generally permits users to tailor-make MRP to their particular

needs.

3.5 Manufacturing Resources Planning (MRP II)

Manufacturing resources planning (MRP II) evolved from MRP in the 1980s because

manufacturers recognised additional needs. MRP II expands the scope of MRP to involve

other areas of a firm in the planning process and enable detailed capacity requirements

planning (see Figure 12).

Figure 12: An overview of MRP II

Normally a firm generates a master schedule in terms of what is needed and not what is

possible. The initial schedule may or may not be feasible given the limits of the production

system and availability of materials when end-items are translated into requirements for


No

Manufacturing

Capacity Requirements Planning



procurement, fabrication, and assembly. Unfortunately, the MRP system cannot

distinguish between a feasible master schedule and an infeasible one. Orlicky (1975)

highlighted that "MRP is capacity–insensitive in that it will call for the production of items

for which capacity may not, in fact, exist". Consequently, MRP was developed into MRP II

to include the capacity requirements planning activity which compares the MRP output to

the available capacity and materials via load reports. If it turns out that the requirements

based upon the current master schedule is not feasible, management needs to decide to

increase capacity (through overtime or subcontracting) or to revise the master schedule

(Stevenson, 2005).

MRP II also seeks for the appearance of finance and marketing personnel in the

establishment of the production plan. The purpose for having these functional areas work

together with manufacturing people is to tap on the expertise of each department and

increase the likelihood of developing a plan that works. Moreover, because each of these

functional areas has been involved in formulating the plan, they will have reasonably good

knowledge of the plan and more reason to work toward achieving it.

One of the most successful MRP II users of the last 15 years is the Coca-Cola Company.

Coke assimilated MRP II into their management culture as a structure and approach for

improving how they manage business. Eight different sites on four continents have

achieved Coke’s “Class A” recognition, and more are on the way (Chase et al., 2006).

3.6 Enterprise Resource Planning (ERP)

Enterprise resource planning (ERP) is the next step in an evolution that began with MRP

evolving into MRP II.

Table1: Major developers of ERP software Source: Chase et al., (2006)

Vendor Special software features Web site

American Software Comprehensive selection; focus on supply chain management

http://www.amsoftware.com

The Baan Company Comprehensive selection of software for discrete and process manufacturing

http://www.baan.com

i2 Technologies Forecasting, flow manufacturing http://www.i2.com

Manugistics Optimization of logistics functions http://www.manugistics.com

Oracle Comprehensive system; major database vendor

http://www.oracle.com

PeopleSoft Comprehensive selection; client/server products

http://www.peoplesoft.com

SAP Integrated client/server system http://www.sap.com



Source: Copyright by SAP AG

Like MRP II, it typically has a MRP core. ERP represents an extended effort to integrate all

departments and functions across a company onto a single computer system that can

serve all those different departments' particular needs (Lamonica, 1999). It permits

information sharing among different areas of an organisation in order to manage the

system more effectively (Stevenson, 2005).

SAP AG, a German firm, is one of the world leaders in providing ERP software. Its major

product is known as R/3. Many of the world's largest companies use the software,

including Baxter Healthcare, Exxon, and even the software giant Microsoft. R/3 consists of

four major modules: Financial Accounting, Human Resources, Manufacturing and

Logistics, and Sales and Distribution. The R/3 applications are fully integrated so that data

are shared among all applications (Chase et al., 2006) (See Figure 13).

Figure13: R/3 Application modules

As an enterprise-wide integrated system, various ERP success stories have been

reported. Particularly, Singapore-based Flextronics International has rolled out ERP to its

26 locations around the globe (Plotkin, 1999).

3.7 Requirements to Apply MRP

MRP is most valuable in industries where a number of products are made in batches using

the same productive equipment (Chase et al., 2006). It is often referred to as a planning

and scheduling technique used for batch production.



In order to implement and operate an effective MRP system, it is necessary to have:

1) A computer and the necessary software programs to handle computations and

maintain records;

2) Accurate and up-to-date master schedules, bills of materials and inventory records;

and

3) Integrity of file data.

Accurate inputs are absolutely crucial for a successful MRP system. For bills of materials,

errors at one level become magnified by the multiplication process used to determine

quantity requirements. Inaccuracies in master schedules and inventory records can lead to

ordering too many of some items and too few of others, which in turn contributes to wasted

resources, failure to stay on schedule, missed delivery dates, and poor customer service.



4.0 INTEGRATION OF JIT AND MRP IN MANUFACTURING

4.1 Rationale for Integration of JIT and MRP in Manufacturing

JIT is often referred to as a "pull" system since the production of the previous work stations

are pulled by the demand of the next stations. Conversely, MRP is usually considered as a

"push" system since each work station produces up to the quantities stated in the MRP

output reports and push their parts to the next station regardless of whether there is an

actual need for their parts. The traditional viewpoint was that JIT and MRP could not exist

in one entity due to the opposite characteristic of pull and push.

However, taking a closer look at each system can reveal a contrary picture in which JIT

and MRP indeed complement each other. JIT does not provide a broad view at planning

level of the operational process; while in this area MRP is considered as a strong planning

system. MRP does not provide a detailed shop floor schedule and often over-produces if

the input data is not accurate; while JIT is a superior execution system on the shop floor.

JIT requires a stable demand to maintain a level production, which narrows the application

of JIT to almost repetitive manufacturing. In the meantime, MRP offers a larger allowance

for variety since the system is most suitable for batch production. The MRP system

encounters inaccuracy of input due to the lack of update from the shop floor while JIT's

strength is to keep everything on the shop floor under control. Organisations working with

JIT may sometimes be at a risk of shortage of goods since the system endeavours to cut

down the inventory level and limits safety stock; inversely, the MRP system's job is to

forecast demand, undertake production and pile up inventory beforehand. Owing to all

these complementary attributes, it is rational to examine the potential of combining or

integrating the best features of both JIT and MRP systems in order to develop a further

advanced system in planning and controlling manufacturing operation (Low and Chan,

1997). These integrated systems are often referred to as hybrid systems.

4.2 Types of JIT and MRP Hybrid Systems

Geraghty and Heavey (2005) defined that "A hybrid production system could be

characterised as a production system that combines elements of the two philosophies in

order to minimise inventory and unmask flaws in the system, while maintaining the ability

of the system to satisfy demand" (p 436). Hybrid systems can be classified into two

categories: vertically integrated hybrid system (VIHS) or horizontally integrated hybrid

system (HIHS).

VIHS consists of two levels, usually an upper level push-type production control strategy

and a lower level pull-type production control strategy. In other words, VIHS utilises MRP

for long range planning and JIT for shop floor execution.



Source: Lee, C. Y (1993)

HIHS consists of one level where some production stages are controlled by MRP and

other stages by JIT. This type is more suitable for multi-stage production processes.

4.3 Vertically Integrated Hybrid System (VIHS)

General Framework of VIHS

VIHS accommodates the best planning features of MRP and the best execution features of

JIT to formulate a more effective manufacturing system.

Figure 14: General framework of vertically integrated hybrid system (VIHS)

Components forecasting



Figure 14 depicts the general framework of VIHS as a matrix of the functions divided into a

planning and an execution phase and grouped into the four management activities –

demand management, inventory management, capacity management and quality

management. The top half of the figure represents the planning phase of the vertical

hybrid production system. It resembles a conventional MRP-based system composed of a

stable master production schedule, a bill of materials and the corresponding inventory

record for each product as the input data (refer to chapter 3 for further details of the MRP

system). The bottom half shows the execution portion of the hybrid production system. The

JIT system, consisting of four building blocks as explained in chapter 2, directs the

production floor and vendor to produce exactly the required number of components. Parts

arrive just in time when they are required. Production is authorised through consumption of

the previous work station. The main principle of VIHS is “plan work, but produce what is

consumed” (Lee, 1993). As a planning tool, MRP anticipates and addresses the

uncertainties inherent in the production lines; while as an execution system, JIT’s task is to

reduce the complexity of the manufacturing process.

How can MRP assist JIT in VIHS?

Working at the planning level, MRP can assist JIT at the execution level in three ways.

Firstly, MRP aids JIT to counter long lead times and shortage of goods.

Figure15: Example of the use of MRP to counteract long lead times

The example in Figure 15 shows the lead times for operations 1, 3, and 4 are one day

each, whereas for operation 2 it is 17 days. This would often be the case where operation

2 was completed outside the JIT shop. Under these circumstances, it could take

information about demand more than 18 days to reach operation 1 from operation 4.

Clearly this could cause many problems if demand changes dramatically. In such cases,

Source: O'Grady, P.J. (1988)



effort should be made to reduce the long lead times, but where it is difficult or impossible

to do so (as with specialised raw materials, for example) an MRP system can be used to

speed up feedback of information to the early operation. The MRP system inputs the future

demand and evaluates the requirements for materials and components. The output from

the MRP system can be fed directly into the early operations (operation 1 in Figure 15) so

that these early operations will receive early notification of any changes in demand. In this

manner, the information for operation 1 arrives, not from operation 2 but from the MRP

system (O’Grady, 1988). If a sudden rise in demand is anticipated, operation 1 will receive

the information much earlier due to the “forward-looking” production triggering

characteristics of an MRP system in which production is planned ahead based on future

requirements (Lee, 1993). Thus, operation 1 will get enough time to prepare production of

enough components or parts. Consequently, the risk of facing a shortage of inventory is

reduced significantly and the service level is improved at a lower cost.

Secondly, MRP facilitates the coordination of various shop floors. MRP is a computerised

system while JIT with Kanban cards is a manual system. A major benefit of the JIT system

is its simplicity; a major benefit of MRP is its ability to handle complex planning

(Stevenson, 2005). In cases where there are multiple shop floors, MRP plays a very

productive part in tracking the information, linking the shop floors via providing faster and

more accurate information transferred among them. Figure 16 diagrammatically

demonstrates that the MRP system can integrate the activities of different shops to ensure

that sufficient raw materials and components are delivered.

Figure 16: Use of MRP system to coordinate JIT shops

Thirdly, MRP provides the means for an automated Kanban system which automatically

recalculates the numbers of all the identified Kanban cards each time MRP is generated. It

automatically creates and downloads a purchase order to the supplier when a supplier’s

Kanban item is triggered by consumption (Louis, 1997). Lee (1993) also agreed that

“computerised [MRP] systems can be used to monitor vendor delivery performance, to

Source: O'Grady, P.J. (1988)



determine group efficiency measurements, to inform suppliers of parts demand, to track

inventory, to consolidate part numbers, to facilitate re-planning, and to identify

opportunities for order quantity and safety stock reductions” (p 6). Overall, the automated

Kanban system reduces the time and effort required to operate the production process via

computerising and automating, where possible, the activities that are previously done

manually.

How can JIT assist MRP in VIHS?

Obviously, JIT offers a detailed shop floor schedule which is absent from MRP outputs.

Moreover, operating at the shop floor level, the discipline of a JIT system can be very

effective in terms of providing the MRP system with more realistic input information relating

to lead time and capacity. The hybrid system avoids the need to specify the planned lead-

time, which is very hard to estimate. Rather, the actual lead time is derived from the

schedule. The short-term capacity is also planned with higher accuracy since the

scheduling process of the integrated system specifies the work centre and time-period for

every operation of a part. This definitely helps to lessen the problems dealing with MRP

assumptions of fixed lead times and infinite capacity.

Assessment of VIHS

As it can be seen from the above discussion, the two systems of JIT and MRP do not

resist each other in VIHS but rather interact and lend assistance to each other. The

combined system weeds out the individual weaknesses and reinforces the individual

strengths of JIT and MRP. However, VIHS has one main disadvantage which is that MRP

calculations must be performed for each stage in the production system. With comparison

to HIHS, which will be discussed later, VIHS is more complex to implement.

4.4 Horizontally Integrated Hybrid System (HIHS)

General Framework of HIHS

HIHS orders some stages by a push-type (MRP) production ordering system and other

stages by a pull-type (JIT) production ordering system (Cochran and Kim, 1998). Beamon

and Bermudo (2000) described HIHS as one that “the push elements of the system cover

from the raw material storage until the components complete processing and goes to a

buffer storage at the end of each line, while the pull elements start from this point down to

the packaging station” (p 351). Figure 17 depicts a framework of the horizontal hybrid

system for a three-line, five-stage production system. From stage 1 to stage 3, the

workstations are under MRP control, which means that components and parts are

produced up to the quantities stated in the MRP output reports and then pushed to the

next stage regardless of the demand of the upstream stage. At the end of stage 3, the



Source: Beamon, B. M. and Bermudo, J. M. (2000)

inventories pile up to form buffering stock. From stage 4 onwards, the production of each

workstation is controlled by the pull from the real demand of the next stage, i.e. each

workstation is working under the JIT philosophy.

For a more advanced model of HIHS, each production stage is not fixed to one production

system but can rather switch between push and pull control depending on whether

demand can be forecasted reliably or not (Hirakawa et al., 1992). Cochran and Kim (1998)

noted that HIHS could have “a movable junction point between a push sub-system and a

pull sub-system” (p 1142).

Figure 17: Example of HIHS for three-line, five-stage system

Assessment of HIHS

Various research has been conducted to compare the effectiveness of HIHS to pure pull or

pure push systems. Hodgson and Wang (1991a and 1991b) developed a Markov Decision

Process model for HIHS. The model solved problems using both dynamic programming

and simulation for several production strategies, including pure pull, pure push, and

integrated ones. Hodgson and Wang (1991a and 1991b) found that for both the four and

five stage production system, a strategy where production downstream stage 1 and 2

pushed and all other upstream stages pulled was demonstrated to result in the lowest

average system cost. The authors argued their findings from the control and information

structure viewpoint. They indicated that the pure pull strategy was a group of decentralised

controllers without any real-time coordination. The system focused on the local goal of

each decentralised controller, which was to satisfy the local demand subject to the

available local supply, instead of paying attention to the global goal of meeting end-users’



demand while saving inventory expenses. On the contrary, the structure of the pure push

strategy was centralised control. Each stage had to obey the production commands given

by the central computer. The intent of the commands was to achieve a global goal. In this

scenario, individual controllers had no ability to affect the local inventory situation

independently. This meant that the pure push strategy could not achieve the desired

inventory situation at all stages. Finally, the horizontal hybrid system, in Hodgson and

Wang’s (1991a and 1991b) standpoint, appeared as a superior strategy containing a group

of decentralised controllers with a centralised coordinator. Individual controllers had the

ability to adjust their inventory situations to meet the local demand; but their material

supply was controlled, in part, by the central computer.

Pandey and Khokhajaikiat (1996) extended Hodgson and Wang’s (1991a and 1991b)

model to allow for the inclusion of raw material constraints at each stage. The authors

concluded that the horizontal hybrid strategy in which the initial stages (1 and 2) operated

under push control and the remaining stages operated under pull control was the best

strategy when raw material constraints applied only to the initial stages.

Wang and Xu (1997) reconfirmed Hodgson and Wang’s (1991a and 1991b) findings by

investigating four 45-stage manufacturing systems and suggested that the optimal

horizontal hybrid strategy outperformed pure pull or push strategies.

Beamon and Bermudo (2000) published a further specific result stating that “statistically it

can be concluded that the hybrid system at 95% confidence level outperforms the pure pull

system in terms of lead time and outperforms the pure push system in terms of work-in-

process inventory” (p 354).

Overall, HIHS is suitable for application in multi-line, multi-stage production systems.

Comparing to VIHS, HIHS is easier to model the key performance measures and their

interactions (Cochran and Kim, 1998).

For both VIHS and HIHS, the use of either JIT or MRP does not preclude the use of the

other; only that, in effect, some situations are more conducive to a JIT approach, others to

an MRP approach (Stevenson, 2005).



5.0 INTEGRATION OF JIT AND MRP IN PREFABRICATION PLANTS

5.1 Precast Concrete Production as a Kind of Manufacturing

Chan (1994) listed twelve different points between the construction industry and

manufacturing which are:

1) Vagaries of weather;

2) Unique “one-off” nature of construction operations leading to absence of

economies of scale;

3) Ease of automation and robotisation;

4) Certainty and problem identification;

5) Designer-producer homogeneity;

6) Immediate appraisal and possession;

7) Influence of economic performance;

8) Owner’s involvement;

9) Safety provision;

10) Organisational structure: short-term nature of construction;

11) Mobility; and

12) Marketing management.

Ang (1999) added onto the list some other differences such as complex communication

and coordination, restrictions imposed by building regulations, and segmentation of the

construction industry. However, most of these deviations happen on the construction sites

during the transporting, unloading, lifting, and installing process of the precast

components. This is after the components have reached the final stage of production and

are ready to be delivered to the clients. In terms of supply chain movement, the part from

the precaster to the main contractor or the owner reflects a pool of dissimilarities between

construction and manufacturing, which calls for appropriate adjustments prior to the

application of any management concepts from manufacturing to the construction industry.

However, as long as it is still within the production process, which means still belonging to

the process from the raw materials vendors to the precasters, the gap between a

prefabrication plant and a manufacturing plant is not that wide. In reality, the production

process at the prefabrication plants share many similarities with that of the manufacturing

plants and this promises a vast potential of bringing managerial systems originating from

manufacturing to the construction industry.



Due to the “off-site” environment, production at prefabrication plants is, in fact, a particular

type of manufacturing. Instead of producing some normal industrial products such as cars,

airplanes, computers, televisions, mobiles phones, etc. the prefabrication plants

manufacture precast concrete components which are then transported to construction

sites for installation. Thus, in a broad sense, concrete prefabrication is almost like a normal

manufacturing process with various stages or workstations operating within the precast

plants.

Figure 18: Typical flow of production process of concrete precast components

Source: Authors of this study

Concrete mixing

Concrete curing



Figure 18 illustrates a typical flow of the production process of precast concrete

components. The production can be roughly divided into six groups of processes which

are (1) cutting, bending and fixing reinforcement bars; (2) mixing concrete in in-house

concrete batching plants; (3) preparing cast-in items (window frames, mounting brackets,

prestressing tendons, connecting hooks, etc.) and finishes requirements (architectural tiles

or special surface treatment); (4) moulding formwork according to the specifications stated

in the contract with the main contractor or client; (5) casting and curing the concrete

components; and (6) demoulding formwork to get the finished precast components. The

second group can be eliminated if the plant uses external ready-mixed concrete.

Of course, the production of precast concrete components cannot be totally the same as

the production process of a typical manufacturing product. Some adjustments are still

needed to align some differences between the two industries due to the influence of the

complexity and high uncertainty in demand of construction businesses. These adjustments

are discussed in the next sections.

5.2 JIT at Prefabrication Plants

JIT Goals

The ultimate goal of the JIT system remains the same whether it is applied in the

manufacturing or precast concrete plants. JIT seeks for a balanced and rapid flow of raw

materials, work-in-process ingredients and finished precast components throughout the

production process.

In order to achieve this ultimate goal, the JIT system at precast concrete plants follows the

supporting goals which are set in the manufacturing environment. This means JIT needs to

implement various methods to eliminate disruptions and attain a flexible system. For

example, overhead gantry cranes of sufficient capacity and operating area coverage to

cover the entire physical factory layout is used; access way is kept clear and wide to

prevent traffic congestion, etc. Wastes at a precast concrete plant appearing in different

situations should be avoided as much as possible. Low and Chan (1997) presented some

insights of the prefabrication wastes as following:

1) Waste from overproduction happens when the precasters produce more than

enough of some standardised and commonly used components.

2) Waste of waiting time comes from poor schedule coordination when the finished

goods have to wait quite a long time in the plant before the construction site is

ready to receive the precast components. For instance, when the project employs

both in-situ and precast concrete, the installation of precast components must

coordinate closely with the casting of in-situ concrete. Precast walls cannot be



installed if the in-situ slab has not reached a stable strength. Waste of waiting time

can also derive from the late deliveries of rebars, cement, aggregates, admixtures,

cast-in items, and finishes materials vendors. Excessive curing time and extensive

surface treatment such as patching works also trigger long waiting time. Delay of

production due to rectification of defective components, breakdowns of gantry

cranes, insufficiency of transport fleet can be other sources of waiting time.

3) Transportation waste derives from unnecessary internal transfer and rearrangement

of raw materials and work-in-process parts. For example, if the reinforcement steel

bar bending yard is too isolated from the production bed, it requires unnecessary

long hours of transferring reinforcement bars from the bending yard to the casting

bed. In some precast plants - especially for those producing civil engineering items

– components, after being casted, are lifted from the production beds to another

location for subsequent finishing operations instead of implementing the finishing

requirements at the same place as the casting process.

4) Processing waste happens when varied and different designs are ordered, which

reduces the benefit of economies of scale since unique formworks are required to

cast the components. Moreover, if wrong concrete grade, wrong sizes of

reinforcement, or wrong types of tiles are used, these can also lead to processing

waste.

5) Inventory waste is often found at precast concrete plants when the precasters stock

large buffer amounts of both raw components and finished products without

considering the risk of obsolescence.

6) Waste of motion comes from unnecessary picking and placing of materials and

inefficient movement of workers during production stages.

7) Waste from product defects can happen in raw materials or in finished goods.

Some examples are corrosive rust in prestressing tendons, or weak concrete due to

impurities of composite ingredients.

JIT Building Block – Product Design

The concrete precaster normally plays the role of a supplier or subcontractor of a project.

As a result, the precaster usually does not have any say over the design aspects of the

components. In order to apply JIT principles relating to product design, it calls for the entire

construction industry to adopt some significant degree of standardisation for the design of

precast concrete components. Too many varieties in design can lead to the need for

unique formwork systems, which in turn can trigger excessive material wastages,

difficulties in moulding and demoulding formwork, and obstruction to concrete casting. In

case the client has concern over the tradeoff between standardisation and aesthetics,



highly standardised components can be used for concealed structural items while non-

standardised items can be used for revealed façade walls to lessen the perceived impact

of standardisation.

In addition, incentives schemes from the government such as buildability scores, buildable

design appraisal system, CONQUAS scores to facilitate the promotion of constructability,

value engineering concept and design and build contractual arrangement in the industry

may also contribute to the adoption of JIT application in precast concrete plants.

JIT Building Block – Process Design

Small lot sizes: The precaster should produce in small quantities for each production

batch and order reinforcement bars, cement, aggregates, cast-in items and finishes

materials in small quantities so that it can reduce inventory, ease the quality control and

obtain a higher degree of production flexibility.

Setup reduction: Setup time in prefabrication can be increased if there is steel bar

congestion or unique formwork being used. Thus, if these situations are minimised, setup

time can be reduced. Flexible formwork that can be demoulded in various planes and

directions instead of a few planes should be encouraged. Proper training for workers can

reap the learning curve benefits.

Besides decreasing setup time, production lead time should also be reduced. One of the

major benefits of precast concrete is the high speed of construction. Therefore excessive

curing time and extensive finishes treatment such as over-patching actually off-set the

advantages of precast concrete components. To tackle this issue, technological

advancement, new methods and materials are needed to achieve curing time within hours

and minimise finishes treatment works. Low and Chan (1997) presented that:

Some well-known examples of such innovative products are lightweight blocks or

partition walls made from autoclaved aerated concrete (AAC) or wood fibre

concrete; and external wall panels made from carbon fibre-reinforced concrete

(CFRC). These innovative products have not only better physical properties,

durability and ease of workability than conventional concrete but also multiple

uses as well, such as fire protection, thermal insulation, sound insulation, load-

bearing, etc. The only common disadvantage of using these products is that they

are not cost effective as compared to conventional precast concrete components.

For instance, CFRC wall panels cost 30% more than conventional precast

concrete wall panels (Low and Chan, 1997, p 151).

Manufacturing cells: Currently, in precast concrete plants, sub-process activities centres

(reinforcement steel bar assembly yard, concrete yard, finishing trades yard, formwork

yard, and production bed) are usually scattered away from one another. This leads to



more material handling during the production. According to JIT principles, precast plants

should be reorganised for their production process to be based on manufacturing cells, in

which interrelated operations are grouped together in cells (Low and Chan, 1997).

Locating sequential production sub-process activities together would minimise costly

space and resource, reduce lead time, eliminate waste, provide better communication,

improve quality, and regulate work flow. Therefore, the precast concrete plants layout

should include clusters of activities. Each cluster consists of its own reinforcement steel

bar assembly yard, concrete yard, finishing trades yard, formwork yard, and production

bed.

Lower levels of inventory: Inventory should be gradually reduced to reveal production

problems. After these problems have been solved, the system will continue to reduce the

inventory level in order to identify and eliminate more subtle obstacles.

Quality improvement: Quality at source may be implemented with the help of the ISO

9000 system, high quality raw materials, in-house concrete mix tests carried out at the

concrete batching plants before mass volume of demand orders begins, and frequent

checks of steel formworks to ensure a smooth surface. Superior workmanship is assured

by efficient supervision. Workers are trained by both formal classroom teaching and

informal on-site or on-the-job training. Tradesmen certification courses conducted by the

Construction Industry Training Institute are required.

Proper construction techniques and equipment are emphasised. For example, improper

placing and compaction of concrete could result in segregation and subsequently,

honeycombs. Plastering which is not carried out according to specifications could result in

hollow spots.

Research and development should be paid attention in order to promote innovative

products that are as cost effective as conventional products but still provide better

functional performance, durability, workability, and ease of installation.

Mechanisation and automation are encouraged with the usage of machines in materials

handling, and formworks assembly and dismantlement.

Precasters, especially for those who use a variety of concrete mix designs such as normal

concrete, lightweight concrete, wood fibre concrete, etc., should set up their own in-house

concrete batching plants since this offers greater flexibility to the timing of orders, and

better quality control at source.

Production flexibility: Various techniques such as small lot size, reducing setup time,

preventive maintenance, cross-trained workers are used to keep the system responsive to

changes.



JIT Building Block – Personnel / Organisation

Workers as assets: The concept of workers as assets rather than production cost should

be upheld and applied strictly in prefabrication plants. In effect, personnel issues should be

considered more seriously in precast concrete plants than in manufacturing plants due to

the fact that the construction industry in Singapore is heavily reliant on a foreign workforce.

The narrow mindset with which foreign workers were looked down upon as cheap and

unskilled labour should be changed. Precasters should actually establish a good

relationship with their workers in order to reduce job hopping, since a high employment

turnover rate will raise their cost. Training should be stressed to improve the workers’ skills

because this directly affects the quality of the products. Workers need to be educated

about the benefits and the requirements of the JIT system so that they can understand

how the system works and then co-operate with their precasters. Empowerment of some

skilled workers with more authority may be considered to be included in the employment

policy.

Besides efforts from the precasters, the government should also have some positive

changes in the foreign workers employment policy. According to Low and Chan (1997), the

government should expend the allowable working period of foreign workers before they

are required to repatriate. A large scale promotional campaign should be implemented to

attract Singaporeans to work in the local construction industry.

Cross-trained workers: Based on the JIT principles, workers should be crossed-trained

to perform multiple tasks. For instance, bar bender should be trained to do not only cutting

and bending of steel bars but also formwork assembly and concreting works.

Continuous improvement: Continuous improvement is an inevitable requirement if

precasters want to bring the JIT concept into their plants. One obvious improvement that

precasters should consider is replacing the current uncovered production beds, which

makes production dependent on the conditions of the weather, by the “covered factory”

concept. By covering the plants, production can proceed in any climatic conditions and

also quality of the production can be enhanced due to better casting and storage

conditions.

Cost-accounting: Whether in manufacturing or in prefabrication plants, JIT applies

activity-based costing, which allocates overhead to specific jobs based on their

percentages of activities.

Leadership / project management: Commitment and leadership from top management

are as important in construction as in manufacturing. Open communication to share ideas

for improvement as in quality circles should be encouraged.



JIT Building Block – Manufacturing Planning and Control

As in the personnel/organisation block, the manufacturing planning and control block in

precast concrete plant should hold on to the same principles as in manufacturing.

Level Loading: Production loading should remain level on a daily basis. This means that,

as long as it is practically possible, the precaster should produce various types of

prefabrication components per day so that it can fit into the installation schedule of the

client.

Pull system: The pull system, in which the production at the previous stage is not

permitted until receiving the pull signal from the demand of the next stage, should be

followed in precast concrete plants. Low and Chan (1997) found that the pull system has

been subconsciously used in the production of non-standardised one-off prefabrication

components; while the push system is widely used by prefabrication firms in the production

of standardised and commonly used precast concrete components.

In term of the production process, the pull system leads the material management and the

production rate of the plant. If moving beyond the production process, the pull concept is

actually the JIT deliveries in which the precaster works closely with the main contractor or

the client to deliver the precast concrete components just precisely when the items are

need.

Visual systems – Kanban cards: Kanban cards or any other visual systems that can

convey the information of the demand throughout the prefabrication plants are encouraged

to be used.

Close vendor relationships: Precasters should have closer relationship with their raw

material vendors since these vendors are expected to provide frequent small deliveries of

high-quality goods. When the relationship between parties is trustworthy, the burden of

ensuring the quality of raw materials will be shifted from the precaster to their vendors. As

such, the selection of vendors should not only be based on price but also quality and on-

time deliveries. Long-term purchase agreements with vendors should be encouraged since

longer purchase contracts can provide the precaster with better credit payment terms.

Reduced transaction processing: Just as in manufacturing, transactions in

prefabrication plants should be kept to a minimum.

Preventive maintenance and housekeeping: Preventive maintenance in precast

concrete plants is as important as in manufacturing but housekeeping in prefabrication

might need more attention since construction firms are often referred to as working in the

Dirty, Demanding and Dangerous (3D) industry.



5.3 MRP at Prefabrication Plants

The MRP and its extended versions – MRP II and ERP – are quite well-known at the level

of the global construction industry. Leitch (2003) reported that the United Kingdom

construction industry saw the top five ERP vendors – SAP, Oracle, Peoplesoft, JD

Edwards, and Baan with a combined market share of 64% - competing with one another in

a market of which the potentially invested capital from clients raised up to hundreds of

million pounds. Even though the adoption of MRP, MRP II or ERP in prefabrication plants

in Singapore might not be as feverish as in the United Kingdom, the penetration of the

MRP related software into local precast concrete plants still needs to be paid attention to.

While applying the MRP system, the precaster needs to take note of some considerations

on the input information. Ibn-Homaid (2002) found that the input variables are less

controllable in construction than in a manufacturing environment.

Firstly, the input data at a precast concrete plant contain much more uncertainty than at a

manufacturing plant. The quantities and the delivery time of the prefabrication components

depend on the actual construction schedule, which is often delayed or fast-tracked due to

many factors on site. This leads to an unstable master schedule that reduces the

effectiveness of the MRP system. Other than that, the homogeneity and standardisation of

required materials of construction are lower than those of manufacturing (Ibn-Homaid,

2002). Major projects often have overlapping design and construction stages, so materials

have to be managed without the benefits of having accurate and complete specifications at

the beginning of procurement. The detailed design of the precast concrete components

may not be available until in the late stage of construction process; therefore, the

requirements stated in the bill of materials may need to be stated with higher tolerance for

inaccuracy.

Secondly, the situation is complicated by the fact that the input information fed into the

MRP system in precast concrete plants is changed frequently. The changes may be in the

quantities and the delivery time (i.e. only changes in master production schedule) or it can

be changes in the specifications of the precast concrete components (i.e. changes in both

master production schedule and bill of materials). Consequently, managing materials for

prefabrication production is a dynamic process (Ibn-Homaid, 2002) and requires frequent

update to ensure the accuracy of the input data.



5.4 Vertically Integrated Hybrid System (VIHS) at Prefabrication Plants

While investigating the application of the materials management system from

manufacturing into precast concrete plants, Low and Chan (1997) noted that:

One of the major drawbacks of the "kanban"/pull system is its lack of visibility for

macro or high-level planning. The pull system is unable to translate the sales

forecast into materials planning and the subsequent detailed breakdown of

component requirements. On the contrary, in a push system, the master

production schedule and the MRP system do the planning and the detailed

materials requirements breakdown. This software also provides an inventory

control system to track production components in inventory locations and all

materials transactions in the factory. This part of the push system works well, but

the system gets into trouble when the prefabricator cuts purchase orders to

suppliers and issue work orders to the factory floor without considering the actual

materials needed. Pull systems, conversely, work very well in self-adjusting the

process variations once the factory's production rate is determined. The individual

workstations do not need to know the complete picture to do a good job in

scheduling materials through the production process (Low and Chan 1997, p

144).

The above remark highlights that it is possible for the VIHS to be applied in precast

concrete plants. Employing the framework explained in section 4.3 while making the

adjustments and considerations as discussed in section 5.2 and 5.3 when applying JIT or

MRP alone, a VIHS can be established in the prefabrication plants. In this VIHS, the MRP

system is used to forecast the demand of the raw materials (reinforcement, cement, sand,

gravel or crushed stones, admixtures, cast-in items and finishing materials). The

information about the forecasted demand is fed into the information system of the raw

materials vendors so that vendors can plan for their own production. As the demand from

the contractor or the client is officially informed, it triggers a pull signal to the production

bed. The production bed in turn signals a pull demand to the reinforcement yard, the

concrete batching plant, the finishing trade yard; and the formwork yard. Since the demand

is forecasted beforehand, if there is a sudden strong pull from the contractor or the client,

the raw materials vendors will still have enough time to meet the demand.

If the precaster have separate production lines for different types of precast components

(i.e. different lines for slabs, columns, beams, walls, etc.), the MRP system can be used to

facilitate the coordination of the lines. The information will be transferred more easily and

faster among the lines with the help from the MRP.



MRP can also automate the Kanban system to automatically recalculate the number of

Kanban cards. Instead of spending time to do all the tedious calculation manually, the

precaster can save effort to do more value-added activities.

5.5 Horizontally Integrated Hybrid System (HIHS) at Prefabrication Plants

A HIHS can also be employed at precast concrete plants if the precasters apply the same

framework as presented in section 4.4 along with the adjustments and considerations

suggested in section 5.2 and 5.3. In particular, the process group 1, 2, and 3 in Figure 17

can apply the MRP push system. Based on MRP output reports of the materials

requirements, the reinforcement bars are cut, bent, and fixed; the cement, sand, gravel or

crushed stones, and admixtures are procured in the expected required amounts. Likewise

for the cast-in and finishing elements. The important note is that the process group 2 can

only apply MRP partially since the concrete cannot be mixed and stored in the warehouse

long before the casting process at the production bed. For the process group 4, 5, and 6,

the JIT concept is deployed. When the demand from the contractor or the client pulls the

finished components at the end of the process group 6, the demand information is

transferred to the production bed at process group 5 and formwork yard at the process

group 4. The concrete mixing at the end of the process group 2 also receives the pull

signal. After the formwork and the concrete mix are available, the casting process starts its

course immediately since reinforcement at the end of the group 1 and the cast-in and

finishing items at the end of the group 3 are all ready for the concrete casting activities at

the beginning of the process group 5.

The main purpose of using HIHS is to shorten the production lead time. Instead of waiting

for the pull signal to pass through the whole production process, the demand only needs to

reach the process group 6, then 5, 4 and partially 2. The process group 1, 3 and a part of 2

have already completed their works even before the demand pull signals reach their

stations. Obviously, the lead time is cut down.

However, HIHS can only be applied for commonly used components which have quite a

huge amount of demand. For non-common components which require odd shapes, special

concrete grade and reinforcement, or extraordinary surface treatment, the preparation for

the process group 1, 2 and 3 ahead of the real demand would be a serious waste if the

demand is changed.



6.0 ANALYSIS OF SURVEY RESULTS

6.1 Design of the Survey and Profile of the Respondents

The survey was conducted from December 2006 to February 2007 and based on the

population of all 30 precasters in Singapore. Before the survey was officially sent to

precasters, a pilot testing was done with the Department of Building, National University of

Singapore. The pilot testing showed no ambiguity, which could lead to some

misunderstanding among precasters. Out of these 30 precasters, plant operation

managers of 19 firms responded to the survey on behalf of their firms. The response rate

is 63.33%. The survey consisted of four parts. Part A asked for the precasters’

background. Part B surveyed on the application of JIT concept during the production

process in the prefabrication plants. This part used a Likert scale of 1 to 5 (refer to

Appendix A for the complete copy of the questionnaire). 1 represented “strongly disagree”

to the statement asked while 5 denoted “strongly agree”. At the end of part B, the

precasters were asked to rank the problems, when applying JIT in their factories,

according to seriousness. Part C questioned the respondents about the awareness and

the adoption of MRP, MRP II and ERP in the precast concrete firms. This part also

included questions on the issues that hindered the application of MRP in local precast

concrete plants. The last part investigated the employment of JIT and MRP hybrid systems

in Singapore’s prefabrication firms. Overall, the main purpose of the survey was to

examine the current adoption of JIT and MRP at precast concrete plants in Singapore and

the potential of bringing the concept of hybrid systems into these plants.

Table 2 presents the composition of respondents, which composed a wide range of

categories from L6 to L1 registered with the Building and Construction Authority (BCA) and

also included firms that have not yet registered with BCA.

Table 2: Composition of survey respondents

Categories No. of respondents %

Registered with BCA

L6 (Unlimited) 5 26.32%

L5 (Limited within S$10 million) 4 21.05%



L2 (Limited within S$1 million) N.A. N.A.

L1 (Limited within S$500,000) 1 5.26%

Not registered with BCA 2 10.53%

Total 19 100.00%



The variety in terms of the categories of responding precasters would help to keep the bias in

the analysis to a minimum.

6.2 JIT Adoption in Prefabrication Plants in Singapore

JIT awareness and ultimate goals

Eighteen out of nineteen (94.74%) precasters confirmed that they had heard of the JIT

concept. Seventeen out of these eighteen firms who knew about JIT (94.44%) agreed that

the ultimate goal of the JIT system is to achieve a balanced, rapid flow of materials. These

high percentages show that currently local precast concrete plants have no problem

relating to the awareness of the JIT philosophy. The concept of JIT has been popularised

among Singapore’s precasters.

However, ten years ago, when Low and Chan (1997) asked the prefabrication industry the

same question, only three firms out of fourteen responding prefabrication firms (21.43%)

had heard about JIT. The dramatic rise of more than four times in terms of JIT awareness

may be explained by the efforts of researchers, practitioners and BCA to promote the

adoption of JIT in the construction industry. This can be viewed as a very positive sign of

disseminating the manufacturing management concepts into the construction industry, and

particularly into prefabrication plants.

JIT supporting goals Table 3: Assessment of JIT supporting goals by precasters in Singapore

JIT Supporting Goals Mean Median Mode Standard Deviation

Coefficient of Variation

Production disruptions 3.13 3.13 3.00 0.74 0.24 Poor quality 2.56 3.00 3.00 1.15 0.45 Equipment breakdowns 3.06 3.00 4.00 1.16 0.38 Changes to schedule 3.89 4.00 4.00 0.76 0.20 Late deliveries from raw materials vendors 3.00 3.00 2.00 1.08 0.36

Flexibility of production system 3.69 4.00 4.00 0.94 0.25 Mix production 3.78 4.00 4.00 0.88 0.23 Changes in level of output 3.61 4.00 4.00 1.09 0.30

Current elimination of wastes 3.29 3.57 4.00 0.85 0.26 Waste from overproducing 3.39 4.00 4.00 1.24 0.37 Waste from waiting time 3.28 3.50 4.00 0.83 0.25 Transportation waste 3.33 3.50 4.00 1.08 0.33 Processing waste 3.11 3.00 3.00 1.02 0.33 Inventory waste 3.28 3.50 4.00 0.96 0.29 Waste from product defects 3.28 4.00 4.00 1.07 0.33 Waste of motion 3.33 3.00 3.00 0.91 0.27



At the strategic level, the mean, median (the middle number when the data are arranged in

ascending order), mode (the value that appears most frequently), standard deviation, and

coefficient of variation (the value equivalent to the standard deviation divided by the mean)

for each element of the JIT supporting goals were calculated based on the Likert scale that

was pre-set at the beginning of the survey. In case of elements consisting of various sub-

elements, the mean of all the sub-elements for each precast plants was calculated. Based

on these means, the composite mean, media, mode, standard deviation and coefficient of

variation were determined.

Firstly, the findings show that the local precasters do not face serious disruptions during

the production process. The composite mean for the production disruptions was 3.13 (out

of 5 as maximum). This figure was quite close to 3 which denoted a neutral stance towards

disruptions. The standard deviation was kept quite low when compared to the other two

supporting goals. However, if comparing to the standard deviations found in other JIT

elements that will be discussed later, this standard deviation of production disruptions was

considered as high. It means that precasters in Singapore vary largely in terms of their

ability to eliminate production disruptions.

When breaking down the reasons leading to production disruptions, the most common

source is the change of schedule from the main contractor or the clients, which may lead

to idling of the production plant if there was postponement in the required delivery time of

the precast components. Changes of schedule actually got a mean of 3.89 and a mode of

4, which means that a large portion of precasters agree that their plants often encounter

disruptions from unstable schedules. The least serious source of production disruptions

seems to be the delay of work due to poor quality. With a mean below the point of 3, on

average, the precast concrete plants in Singapore are positive that their production lines

do not often have to stop due to the rectification and rework of defective components.

However, it should be noted that the disruption due to poor quality had a very high

standard deviation of 1.15 and a high coefficient of variation of 0.45. In the other words,

the extent to which the production process is disrupted due to poor quality can fluctuate to

almost 50% of the mean value among the precasters. Thus, the seriousness of disruption

created by defects in quality could be underestimated if only the mean value is considered.

Efforts should be poured in to raise the uniformity of quality among precast concrete

plants.

Secondly, the mean of 3.69 – which is reaching 4 - for the degree of flexibility of production

in the local prefabrication plants indicates that the precasters in Singapore owned quite a

flexible system. However, again the standard deviation and the coefficient of variation of

this supporting goal remained high, which indicated that the flexibility of prefabrication

varies from precaster to precaster. When comparing with the deviation in the degree of

disruption, the flexibility level of precast concrete firms is even more fluctuating due to the

higher standard deviation and coefficient of variation.



Lastly, the current elimination of waste in the prefabrication plants is considered as better

than neutral. But the composite mean of 3.29 was not high enough to conclude that local

precasters have an efficient waste elimination system. In all type of wastes, precasters

seem to be best at reducing waste of overproduction. However, this type of waste had the

highest standard deviation among the seven types of waste which illustrated the scattering

of the precasters’ ability to eliminate those wastes falling in this category. In addition,

reduction of processing waste is a little behind other categories with a mean of only 3.11;

and elimination of waiting time seems to be the most stable waste category with a lowest

standard deviation compared to other type of waste.

Overall, the findings show a slightly high rate of disruption but provide some positive proof

of the ability to attain flexible system and to eliminate wastes at the precast concrete

plants. However, the positive proof was not strong enough when comparing with the

desired mean of 4 which demonstrates an agreement on the effectiveness of JIT

supporting goals.

JIT building blocks

At the tactical level, Table 4 to Table 6 represent the assessment of the application of

three JIT building blocks - which are process design, personnel/organisation, and

manufacturing planning and control - in the local precast plants. The product design block

was not examined in the survey. The reason is that precasters normally do not have any

say in the design aspects of the products. They just follow the specifications from the

contract with the main contractor or the client. It is more effective to exempt the

investigation of the application of JIT product design in this survey and only include in

future works if there is the participation of clients in those studies.

For the Process design block, the results were quite significant, with three out of six

elements reaching the mean of 4. Quality improvement - especially in terms of using ISO

systems and continuously identifying and eliminating problems - production flexibility, and

the capability to lower the inventory level are three JIT process design elements that

prefabrication plants in Singapore are good at. The means for these elements were 3.80,

3.94, and 3.89 respectively. Moreover, the modes of these three elements all had the

value of 4, which indicated that most of precasters agreed that they have attained good

quality improvement, high production flexibility and a low level of inventory. The standard

deviation and the coefficient of variation for these elements were also at acceptable rates,

which highlighted a higher degree of uniformity among precasters compared to other

elements.



The main problem that precasters face in process design is how to use small lot sizes

production batch and small lot sizes raw material ordering. This element has not only a low

mean value of 3.06 but also low median and mode value of 3. It happens since the

precasters were used to the old mindset of bulk production and procurement in order to

take advantage of economies of large scale production.

For the personnel/organisation block, the results highlight a very good situation in which

the leadership element reached a mean of 4.17 which passed the desired mean point of 4.

The standard deviation and the coefficient of variation for leadership were also one of the

lowest in all the three tables. In particular, the top management in the precast concrete

plants showed a very high level of commitment (4.39) to bring JIT into their plants. Other

elements like “workers as asset” and “continuous improvement” were close to a mean of 4.

“Cross-trained workers” and “activity-based costing” had quite high means as well. Overall,

the standard deviation and the coefficient of variation of elements in this block were

maintained at a low level, which indicates that the precast firms do not deviate too far

away from one another in term of the personnel/organisation block.

Table 4: Assessment of JIT process design block

JIT building block - Process Design

Mean Median Mode Standard Deviation


Small lot sizes 3.06 3.00 3.00 1.00 0.33

Setup time reduction 3.69 3.83 4.00 0.50 0.14

Simple & standardised tools 3.78 4.00 4.00 0.55 0.15

Simple & standardised procedures 3.89 4.00 4.00 0.58 0.15

Multi-purpose equipment 3.39 4.00 4.00 0.85 0.25

Manufacturing cells 3.28 3.00 3.00 0.57 0.18

Quality improvement 3.80 4.00 4.00 0.60 0.16

ISO systems 4.06 4.00 4.00 1.00 0.25

Continuous improvement 4.11 4.00 4.00 0.68 0.16

Autonomation / Jidoka 3.22 3.50 4.00 1.00 0.31

Production flexibility 3.94 4.00 4.00 0.64 0.16

Lower level of inventory 3.89 4.00 4.00 0.57 0.15

Raw materials 3.94 4.00 4.00 0.54 0.14

Work-in-process 3.89 4.00 4.00 0.58 0.15

Finished components 3.83 4.00 4.00 0.71 0.18



For the last JIT building block of manufacturing planning and control, the findings do not

offer a picture that is as bright as the one on personnel / organisation block. But it is still

considered as better than the process design block. Even though preventive maintenance

and housekeeping had high means of 4.17 and 4.11, the mean points for other the three

elements (level loading, pull system, and reduce transaction) were only around 3.6. Close

vendor relationships had quite a good result of 3.85 for the mean point and especially the

long-term relationship sub-element even had a mean point of 4.44 (out of 5). This

demonstrates that precasters, in reality, do connect closely with their raw material vendors

in order to improve the production effectiveness. The lowest point in this block belonged to

Kanban cards. The reason may be because precast concrete plants choose other

methods to convey the demand information intra- and inter- organisations rather than

using withdrawal and production cards as per the Kanban system.

Table 5: Assessment of JIT personnel / organisation block

JIT building block - Personnel/Organisation



Workers as Assets 3.92 4.00 4.00 0.55 0.14

Proper training 4.06 4.00 4.00 0.64 0.16

Empowering with more authority 3.78 4.00 4.00 0.65 0.17

Cross-trained workers 3.72 4.00 4.00 0.57 0.15

Perform several parts of a process 3.83 4.00 4.00 0.51 0.13

Operate a variety of machines 3.61 4.00 4.00 0.70 0.19

Continuous improvement 3.93 4.00 4.00 0.48 0.12

Workers involved in problem solving

3.78 4.00 4.00 0.65 0.17

Workers can stop production line if find problems

3.89 4.00 4.00 0.58 0.15

Workers are encouraged to report problems

4.11 4.00 4.00 0.58 0.14

Activity-based costing 3.78 4.00 4.00 0.81 0.21

Leadership 4.17 4.00 4.00 0.46 0.11

Commitment of top management 4.39 4.00 4.00 0.50 0.11

Managers as facilitator rather than order givers

3.94 4.00 4.00 0.64 0.16

Two-way communication 4.17 4.00 4.00 0.51 0.12



Table 6: Assessment of JIT manufacturing planning and control block

JIT building block - Manufacturing Planning and Control



Level loading 3.67 4.00 4.00 0.69 0.19

Pull system 3.67 4.00 4.00 0.91 0.25

Kanban cards 3.00 3.00 4.00 1.08 0.36

Close vendor relationships 3.85 3.75 4.00 0.53 0.14

Long-term relationship 4.44 4.00 4.00 0.51 0.12

Frequent small deliveries 3.89 4.00 4.00 0.96 0.25

Quality assurance shifted to

vendors

3.61 4.00 4.00 1.04 0.29

Small number of vendors 3.44 4.00 4.00 0.86 0.25

Reduce transaction 3.60 3.63 4.00 0.43 0.12

Logistical transactions 3.67 4.00 4.00 0.69 0.19

Balancing transactions 3.56 4.00 4.00 0.70 0.20

Quality transactions 3.61 4.00 4.00 0.50 0.14

Change transactions 3.56 4.00 4.00 0.51 0.14

Preventive maintenance 4.17 4.00 4.00 0.62 0.15

Housekeeping 4.11 4.00 4.00 0.76 0.18

Problems encountered when applying JIT in prefabrication plants

Only fifteen out of nineteen respondents (78.95%) revealed the problems that they

encountered when applying JIT in their production. Among these fifteen precasters, nine of

them (60%) ranked requirement for stable demand (to facilitate level loading), inventory

reduction (while still fulfilling the same service level), and difficulties in reducing setup time

as the top three serious problems. The findings are in fact quite reasonable since the

requirement of a stable demand is one the major drawbacks of the JIT concept while

reducing inventory and setup time are two challenging prerequisites required at all JIT

firms. The next serious issue was in how to get support from the raw materials vendors

since JIT requires small frequent deliveries from the vendors. The other four factors -

which were lack of commitment from top management, poor support from workers, a long

time to get positive results, and no assurance of cost benefits – were those that are quite

equally challenging when the precasters employed the JIT principles in their plants. Odd

shapes in the design can also be a problematic issue.

The findings from the problems encountered by precasters when applying JIT in their

plants theoretically offer no surprise since all these problems have been discussed in

chapters 2, 4 and 5. The value of the findings comes from the ranking sequence in which



precasters in Singapore show the most difficulties in tackling the requirement for a stable

demand, inventory reduction and setup time decrease. As the sequence has been

established, the priority, in which more efforts are poured in to solve the more serious

issues, is also determined.

6.3 MRP adoption in Prefabrication Plants in Singapore

The number of precasters who indicated that they had heard of the MRP, MRP II and ERP

concepts were seven (36.84%), six (31.58%), and five (26.32%) respectively. As can be

seen from these figures, the awareness of MRP-related software decreased as the

software become more complicated. However, when coming to the application of those

systems, four of respondents (21.05%) applied the inventory control method, two used

MRP II (10.52%), and one (5.26%) had all MRP, MRP II, ERP and inventory control in their

system. The remaining 12 precasters did not adopt any of the system mentioned above.

Table 7 compares the findings of this study with those of Low and Chan (1997). From the

table, there is an obvious trend reducing the usage of any of MRP, MRP II, ERP and

inventory control systems. The application of inventory control systems decreased from

29% to 21%. This may be explained by the fact that the inventory control systems with

their various shortcomings are no longer suitable for the manufacturing at precast concrete

plants. For MRP, in both cases, none of the precasters has used MRP as a stand alone

system.

Table 7: Comparison of MRP, MRP II and ERP adoption

Systems Low and Chan (1997) This study (2007)

Only inventory control system (1) 29% 21%

Only MRP system (2) N.A. N.A.

Only MRP II system (3) 14% 11%

Only ERP system (4) N.A. N.A

(1) and (2) 50% N.A.

All of (1), (2), (3) and (4) N.A. 5%

None of (1), (2), (3) and (4) 7% 63%

In 1997, 50% of the precasters employed MRP concurrently with the application of the

inventory control system. In 2007, the number of firms using both MRP and inventory

control method has fallen dramatically to zero. The usage of MRP II also dropped from

14% to 11%. Particularly, the application of ERP remains similar between two studies,

which highlights that after ten years ERP still cannot penetrate into the prefabrication

market in Singapore. Moreover, previously only 7% of the precasters did not use any of

the MRP, MRP II, ERP and inventory system; now the number has risen to 63%. Overall,

the findings offer a gloomy picture for the application of any MRP, MRP II, and ERP



software. After ten years, the MRP related software do not become more popular but even

show some signs of declining in terms of application rates. The underlying reasons may be

because precasters have preferred other production management systems such as JIT

and theory of constraints.

The three precast concrete plants currently having MRP-related software in their systems

(16%) indicated that the most serious issue while adopting the software was the lack of a

detailed shop floor schedule. This actually provides a very good basis for vertical hybrid

system to be developed since VIHS has MRP as the planner and JIT as the executer.

Inaccurate inventory records and inaccurate lead time were the next problems that have to

be tackled. Inaccuracy in demand forecast (i.e. master production schedule) and bill of

materials (BOM) also triggered inefficiency for the system.

The plants that applied inventory control argued that they still remained on this old-

fashioned system due to the high initial investment cost and the complexity of installing

MRP, MRP II or ERP. One of them also claimed that they saw no necessity in using the

MRP, MRP II or ERP system due to their small scale production. This suggests that

another reason for the low application rate of MRP-related software is the resistance to

investment in technology due to financial insufficiency or because of the small operational

extent of the firms.

Twelve precast concrete plants that did not apply any of MRP, MRP II, ERP or inventory

control systems did not provide any particular reason for the non-adoption. However,

checking their awareness of the MRP system reveals that all of them had not heard about

any of the MRP, MRP II and ERP systems. Therefore, their absence in adopting MRP-

related software can be attributed to the precasters’ insufficient awareness of such

systems. It may be that the popularity of MRP software has been diminished since more

advanced yet lower cost management systems have been innovated and gradually

replaced the usage of MRP systems.

6.4 Adoption of JIT and MRP Hybrid Systems in Prefabrication Plants in Singapore

Awareness of JIT and MRP Hybrid Systems

Six out of nineteen precasters (31.58%) believed that JIT and MRP have different sets of

strengths and weaknesses, thus these two systems can complement each other and co-

exist in one firm; while the remaining thirteen firms (68.42%) had no idea about whether

JIT and MRP could work together or not. The figures show that there is an immediate need

for raising the awareness level of the prefabrication industry about the JIT and MRP hybrid

systems since more than two-thirds of the precasters do not know the benefits of these



hybrid systems and thus they have no incentives to go through all the changes and

adjustments in order to apply these hybrid systems into their production processes.

Willingness to adopt JIT and MRP Hybrid Systems

(a) Are precasters ready for the adoption of hybrid systems?

Table 8 presents the willingness of precasters to adopt JIT and MRP hybrid systems. As

can be seen from the table, there were two precasters (10.53%) who have already applied

JIT and MRP hybrid systems in their production system. For those that have not adopted

any of JIT and MRP hybrid system yet, only one plant (5.26%) showed interest in bringing

hybrid system into their production process. The rest were not interested (21.05%

comprised of 5.26% who knew about the benefits of the hybrid systems but still do not

want to adopt and 15.79% who do not know the benefits of those systems therefore do not

have any interest in applying) or not sure about their choices yet (63.16% comprised of

10.53% who knew about the benefits of the hybrid systems but still have not decided

whether they should adopt any of these systems or not and 52.63% who do not know the

benefits of those systems thus are currently indecisive). The findings show that the current

adoption of the JIT and MRP hybrid system are at quite a low rate. However, the potential

to persuade the indecisive firms to lean to the adoption side is significant since this portion

makes up to 63.16% of the firms surveyed; especially when more than half of the

precasters (52.63%) have no idea about the benefits of the hybrid systems.

Table 8: Willingness to adopt JIT and MRP hybrid systems

Number of Precasters

%

Already adopted hybrid systems

Adopt VIHS 2 10.53%

Adopt HIHS 0 0.00%

Have not adopted any hybrid system yet

Knew about benefits and will adopt a VIHS 1 5.26%

Knew about benefits and will adopt a HIHS 0 0.00%

Knew about benefits but will not adopt any hybrid system 1 5.26%

Knew about the benefits but are not sure about future adoption 2 10.53%

Do not know about benefits and will not adopt 3 15.79%

Do not know about benefits and are not sure about future

adoption 10 52.63%

19 100.00%

As it can seen from the Table 8 and also can be deduced from the answers for the last

questions in the survey, the main reason for the low interest towards hybrid systems was



unawareness of the existence of the hybrid systems and lack of knowledge of the benefits

that these systems provide. Some other reasons are the lack of a clear framework that can

be applied specifically in prefabrication plants, the complexity of installation process, the

lack of experienced staff to manage the systems, and the fear of expensive installation

costs. In order to promote the application of the JIT and MRP hybrid systems, firstly,

academic researchers should help to raise the awareness level of the precasters via

seminars or published works. It would be a great help as well if the government could

come up with some promotional campaigns or incentive schemes to enhance the common

level of knowledge about the hybrid systems. A clear framework should be established by

researchers to facilitate the adoption of these systems. More importantly, precasters need

to be open minded to bring innovations into their production plants.

(b) VIHS versus HIHS

For the two precasters who have already adopted hybrid systems, the VIHS were found at

their production plants. None of the firms was found to have adopted a HIHS. For the

plants interested in adopting hybrid systems in the future, the firms also showed their

preference in the VIHS. None has shown interest in applying a HIHS in the future. So far,

the VIHS seems to dominate the HIHS in terms of drawing interest from precast concrete

plants. This can be understandable since the most serious problems ranked by

Singapore’s precasters in employing MRP is the lack of a detailed shop floor schedule,

which is the main rationale for a vertical hybrid system. A VIHS can address perfectly the

problems encountered by the precasters since it uses MRP as the planning tool and JIT as

the execution techniques on the shop floor.



7.0 CONCLUSION

7.1 Summary of the Findings

The findings from the survey reveal an optimistic picture on the application of JIT in

prefabrication plants in Singapore. More than 90% of the precasters surveyed have heard

about the JIT philosophy and understood the ultimate goal of the system. Even though the

achievement of the strategic supporting goals - which are eliminating disruptions, obtaining

production flexibility, and minimising wastes – was not well expressed by the precasters,

the application of each tactical principle offers a brighter view of the current adoption of the

JIT concept in precast concrete plants. The most successful JIT building block that has

been adopted by the prefabrication industry is related to the personnel and organisation

aspects. This may be due to the high level of commitment from top management in

improving the production processes. More attention is needed to enhance the application

of JIT in process design; especially precasters need to change the traditional mindset of

producing and ordering in bulk in order to attain the small lot sizes requirement in JIT.

While applying JIT in precast concrete plants, much effort is needed to overcome

obstacles from the top three severe problems, which are the requirement for stable

demand and the difficulties in reducing inventory and setup time.

Contrary to the rosy picture of JIT application, the employment of MRP, MRP II and ERP in

precast concrete plants in Singapore seems to hold less promise. The percentage of

precast concrete plants using MRP, MRP II or ERP is decreasing. In fact, ERP has not

been able to break into the prefabrication industry in Singapore. In addition to less usage

is the large percentage of precasters who do not have basic understanding of the MRP,

MRP II and ERP systems. One of the most serious problems relating to the adoption of

these systems seems to be the lack of awareness and poor promotion from the software

vendors.

For the application of the JIT and MRP hybrid systems, the survey results showed very low

percentages from interested parties. 10.53% of the precasters surveyed have already

installed a hybrid system in their production system; and 5.26% expressed that they might

adopt hybrid systems in the future. In order to raise the potential of applying JIT and MRP

hybrid systems, the first task that needs to be done is to promote the benefits of the hybrid

systems, increase awareness of the existence and benefits of these systems, and help

precasters to establish a clear framework concerning the integration process.

Finally, while comparing the vertical hybrid systems to horizontal hybrid systems, the

former seems to have a more favourable future than the latter.



7.2 Validation of Research Hypothesis

The research hypothesis at chapter 1 was as follows:

“JIT and MRP both have their own strengths and weaknesses. When they work

together, they would complement each other and further enhance the effectiveness

of the prefabrication plants producing precast concrete components”

Based only on the theoretical discussions in chapter 2 to chapter 5, the hypothesis should

be true since the two frameworks set out in chapter 4 and repeated in chapter 5 illustrated

clearly how JIT and MRP can complement each other and enhance the production at

precast concrete plants.

However, the survey results did not show any direct evidence to support the hypothesis,

but neither was there any rejection. As a result, the research hypothesis has not been

conclusively proved yet. Further research to test the nature of the hypothesis is

recommended. Nevertheless, the findings of this study suggest that lessons from the

manufacturing sector, with specific reference to the integration of JIT and MRP, can be

transferred for application in the construction industry, particularly in the context of

manufacturing precast concrete components.

7.3 Comments on Pedagogical Rationale

The pedagogical rationale for teaching JIT principles to both undergraduate and

postgraduate students was described in Chapter 1. It explained the incorporation of JIT

principles in the two modules Quality and Productivity and Project Management at the

Department of Building, National University of Singapore in response to the construction

industry progressing towards a manufacturing-based platform. The module Development

Technology and Management, which incorporates the basic building blocks of the BDAS

and the underlying buildability principles arising from prefabrication, was also taught in the

Department. In Singapore’s case, teaching JIT in the curriculum was a direct response to

the Singapore government legislating buildability which favours precast components.

Although the Singapore’s scenario may be a special one, there are lessons for other

countries whose construction industries are also moving towards prefabrication, as in the

case of Finland which embraces open building manufacturing (Eichert and Kazi, 2007).

The Singapore’s experience suggests that JIT alone may not be adequate. From previous

research in Singapore (Low and Choong, 2001a, b, c), it was found that some precasters

were not adopting JIT’s pull production system in its entirety. Some precasters were found

to favour MRP’s push production system instead. The present study suggests that JIT and

MRP may in fact complement one another. Hence, apart from teaching JIT in Quality and

Productivity and Project Management, it may be appropriate to also include MRP in the

curriculum. The over-arching purpose of this paper is to provide an analysis of how and to

what extent the construction industry, with specific reference to the precast concrete



sector, had adopted JIT and MRP. With the findings of this analysis in mind, university

teachers are encouraged to supplement the teaching of JIT with appropriate MRP

concepts to provide a more holistic learning platform for students in so far as productivity

enhancement lessons are concerned.

Teaching JIT in professional building-related courses at the university cannot merely be

based on text books alone. To be effective, real life case studies should be shared in the

classroom setting. This was achieved at the Department of Building, National University of

Singapore through collaborative research work with the industry. For instance, employees

at a major construction firm were trained in JIT principles for real life application in site

layout planning and management. The lessons learned were published and used in

classroom teaching as part of case-based learning (Low and Mok, 1999). A systematic

study of JIT application in the precast concrete industry as well as the ready-mixed

concrete industry was also completed over the past ten years (Low and Chan, 1997; Low

and Choong, 2001a, b, c; Low and Wu, 2004; Wu and Low, 2005a, b). Such studies

provided significant findings on the challenges and problems faced by organisations when

they applied JIT principles in their work processes. There is a strong link between research

and teaching where classroom teaching of JIT is concerned. Along the way, it was also

necessary to examine the MRP system as a possible complement to JIT.

Hence, the approach is one of continuously refining classroom teaching of JIT to reflect

real life practice as much as possible. For researchers and teachers outside of Singapore

who wish to embark on the same journey to teaching JIT principles in the university

classroom setting, the above narration can serve as a useful research agenda for

implementation in their own countries and universities. This is especially relevant if they

hope to achieve higher productivity levels through the manufacturing-based platform.

From student feedback, the experience at the Department of Building, National University

of Singapore suggests that the end objectives of teaching JIT principles have been

achieved. There is a better understanding among the students of what JIT is all about and

how its principles can be applied to enhance higher productivity in the context of the

construction industry moving towards prefabrication in response to the legislation of

buildability in Singapore. However, from past experience, it is also necessary to clarify to

students that JIT is not about time management alone. This is because the “time”

component in JIT (Just-In-Time) may give students the wrong impression that timely

completion of tasks is what JIT is all about. With this reminder, the next step for educators

in professional building-related programmes would be to extend the teaching of

productivity to beyond JIT to encompass MRP.

Experience at the Department of Building, National University of Singapore suggests that it

is both desirable and possible to incorporate industry and professional practice issues in

the teaching curriculum. From the pedagogical viewpoint, it is also desirable to include



industry-led initiatives such as the BDAS and CONQUAS in the curriculum. In this context,

the BDAS, which is an industry-wide evaluation criterion, was taught to building students

through lectures, tutorials and final year dissertations. Students were assessed on their

abilities to apply the buildability principles which they have learned in specific contexts

through critical thinking. The curricular objectives for transferring the BDAS and related

buildability issues to the classroom setting were achieved.

Beyond the BDAS, which is one of the enablers driving prefabrication in the construction

industry, the Department also found it desirable to teach JIT and MRP to building students.

Nevertheless, the pedagogical approach towards teaching JIT and MRP in the classroom

would need to be slightly tweaked following the findings of the analysis presented in this

study. The analysis found that the most successful JIT building block that has been

adopted by the prefabrication industry is related to the personnel and organisation

aspects. Less emphasis was placed on the application of JIT in process design. Hence,

more attention is needed in classroom teaching to enhance the application of JIT in

process design; especially in conveying the need for precasters (and students) to change

the traditional mindset of producing and ordering in bulk in order to attain the small lot

sizes requirement in JIT. Furthermore, in order to raise the potential of applying JIT and

MRP hybrid systems, the first task that needs to be done in the classroom setting is to

promote the benefits of the hybrid systems, increase awareness of the existence and

benefits of these systems, and help precasters (and students) to establish a clear

framework concerning the integration process. Likewise, while comparing the vertical

hybrid systems to the horizontal hybrid systems in the analysis, the former seems to be

preferred than the latter by precasters. Hence, more attention should also be given to the

JIT-MRP vertical hybrid system in the classroom setting.

7.4 Limitations of the Study

The limitations of the study mainly come from the input data of the survey:

1) The prefabrication industry in Singapore is small in scale, which makes the

statistical analysis of the survey not as accurate when compared with other

industries with larger populations;

2) The answers in the survey were subjective since the survey used the Likert scale

instead of just having yes/no questions. As such, the answers may not truly reflect

the whole industry since all respondents have their own range for the scale; and

3) Some questions in the survey were left unanswered by the respondents. For

example, the question on the benefits of the JIT and MRP hybrid systems at the two

precast plants that have already installed them was left blank. Therefore, some

findings were left without an in-depth understanding due to the lack of information.



7.5 Recommendations for Future Work

Since the hypothesis of this research was inconclusive, it is recommended that future work

can provide another research method to test the hypothesis and offer a conclusion to the

question of whether the hypothesis is correct or not.

Based on the supply chain framework, this study only worked on the integration of JIT and

MRP from the raw materials vendors to the precasters. The path of the supply chain from

the precasters to the main contractors and the clients has not been discussed.

Another direction for future work is that the integration of the JIT and MRP concept can be

extended beyond the prefabrication plants to construction sites. No matter how much

research has been done, there would always be room for innovation and improvement,

which future work can explore.



8.0 Acknowledgement

The authors would like to thank all the precasters who have responded positively to the

survey. They would also like to thank the Department of Building, National University of

Singapore for the administrative support rendered.

Many thanks also to Professor Chris Webster from the Higher Education Academy Centre

for Education in the Built Environment (CEBE) for his valuable suggestions relating to the

pedagogical aspects of this Working Paper. His insightful comments have certainly helped

us to refocus the thrust of the paper. Last but not least, we are grateful to Ms Diane

Bowden for her professionalism and efficiency in responding to our queries ever so

promptly. Ms Bowden’s thoroughness in editing the proofs of the paper is really amazing.



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SURVEY QUESTIONNAIRE

10.0 APPENDIX A Research on: “Integration of just-in-time (JIT) principles and material requirements planning (MRP) in Prefabrication Plants in Singapore”

The purpose of this survey is to find out whether there is an integration of just-in-time (JIT) and material requirements planning (MRP) concepts at the prefabrication suppliers’ factories in Singapore. Please be assured that the findings are for academic purposes only, and your particulars will be kept confidential. It will be very much appreciated if you could complete the following questionnaire by filling in the blanks and ticking the appropriate rating which best fit your company. A. COMPANY’S BACKGROUND 1. Company’s Name: 2. Category: L1 L2 L3 L4 L5 L6 N.A. 3. If the survey’s result suggests that some further clarification is needed via conducting an interview at your office, would your company be willing to participate? If yes, then how would I contact you? Person in charge: …………………………………………………………………………………………………………… Address: ……………………………………………………….…………………………………………………... Email: …………………………………………………………………………………………………………… Phone No: …………………………………………………………………………………………………….



1 2 3 4 5

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B. EXTENT OF JUST-IN-TIME (JIT) APPLICATION 1. Have you ever heard of the JIT concept? [ ] Yes [ ] No If yes then proceed to question 2 - part B. If no then proceed to part C. 2. Do you agree that the ultimate goal of JIT is achieving a balanced, rapid flow of materials and/or work through the system? [ ] Yes [ ] No

Choose the most appropriate choice for the following questions: (1 - Strongly disagree; 2 – Disagree; 3 – Neutral; 4 – Agree; 5 – Strongly agree)

3. To what extent does your company encounter disruptions from:

Poor quality Equipment breakdown Changes to schedule Late deliveries from raw materials vendors

4. How do you rate the flexibility of your company’s system in terms of:

Being able to handle a mix of product lines on daily basis

Being able to handle changes in level of output 5. To what extent does your company effectively eliminate wastes of:

Overproduction Waiting time Unnecessary transporting or handling Processing waste (unnecessary steps, scrap) Inventory waste (high level of inventory) Product defects (causing costly re-work or correction) Waste of motion (unnecessary workers’ movement)



6. To what extent does your company include the following features in the process design of the production?

1 2 3 4 5 Using small lot sizes when ordering raw materials Reducing setup time by

- Simple & standardised setup tools & equipment - Simple & standardised setup procedures - Multi-purpose equipment

Establishing manufacturing cells (a group of closely located workstations dedicated to the production of a limited number of similar parts)

Improving Quality by - Achieving quality certificates: ISO9000 & ISO14000 series

- Continuously finding and eliminating the causes of problems even if it requires to stop the production line during the process of eliminating problems

- Applying autonomation / Jidoka (automatic detection of defects during production)

Creating production flexibility (ability to accommodate changes) Minimising inventories of

- Raw materials - Work-in-process precast components - Finished precast components

7. To what extent does your company include the following personnel/organisational features?

1 2 3 4 5 Workers as Assets

- Implementing intensive training programs - Empowering workers with more authority

Cross-trained workers - Performing several parts of a process - Operating a variety of machines

Continuous improvement - Workers get involved in problem solving - Workers can stop the production line if finding serious problems - Workers are encouraged to report current or foreseeable problems

Application of activity-based costing (Allocation of overhead to specific jobs based on their percentage of activities. Replace traditional accounting method which allocates overhead on the basis of direct labour hours)

Leadership/ Project Management - Commitment from top managers to improve production process - Managers are leaders/ facilitators, not order giver - Two-way communication between workers and managers



8. To what extent does your company include the following features in the manufacturing planning and control?

Levelling loading (relative fixed production schedules)

Pull system (work moves on in response to demand from the next stage in the process instead of being pushed to the next station as it is completed)

Using Kanban card (or any other visual methods) to communicate demand for work or materials from the proceeding station

Close vendor relationships

- Has long-term relationship with raw materials vendors - Has raw materials vendors providing frequent small deliveries - The burden of ensuring quality shifts to the vendors - The company only deals with a small number of raw-materials vendors

Reducing transaction processing / paperwork - Reduces logistical transactions (ordering, execution, confirmation of

materials procurement, etc.) - Reduces balancing transactions (forecasting, production planning,

production control, scheduling, etc.) - Reduces quality transactions (appraisal, prevention, correction of

failures, etc.) - Reduces change transactions (changes in specifications, bills of

materials, quantities, etc.)

Using preventive maintenance (maintenance of equipment in good operating condition and replace parts that have a tendency to fail before they actually do fail)

Housekeeping (maintain a workplace that is clean and free of unnecessary materials)

9. In your opinion, what are the most troublesome problems when applying JIT in a prefabrication supplier’s factory? Please rank the problems according to their seriousness (1 is the most serious problem) Lack of top managers’ commitment Lack of support and cooperation from workers Lack of support and cooperation from raw materials vendors Difficult to reduce set-up time Difficult to reduce inventory level while fulfilling the same service level Require a quite stable demand Take long time to start getting obviously positive results No assurance of cost benefits Others (Please state)

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C. EXTENT OF MATERIAL REQUIREMENTS PLANNING (MRP) APPLICATION 1. Have you ever heard of any of those concepts? Material Requirements Planning (MRP) Manufacturing Resources Planning (MRP II) Enterprise Resource Planning (ERP)

If yes then proceed to question 2. If no then proceed to the end of the survey. 2. Which of the following manufacturing planning systems you are currently adopting? (a) Inventory control system (b) Material Requirements Planning (MRP) (c) Manufacturing Resources Planning (MRP II) (d) Enterprise Resource Planning (ERP) (e) Others (Please state)

If your answer is (b), (c), or (d) then proceed to question 3 and 4. After that, skip question 5 - part C and move to part D. If your answer is none of (b), (c), or (d), please proceed to question 5 - part C 3. Please name the following: Software in use: Provider of software:

4. Please rank the problems you are currently encountering in term of seriousness. (1 is the most serious problem) Inaccurate forecasting of demand Inaccurate bill of materials Inaccurate recording of inventory level Inaccurate lead time MRP/ MRP II/ERP outputs do not consist of detailed shop floor schedule Others (Please state)

5. Please rank the reasons why you are currently not adopting any of MRP, MRP II, or ERP? (1 is the most important reason) High initial investment cost Takes long time to get obviously positive results Complex to implement Complex to maintain Risk of high inventory level due to inaccurate inputs into systems MRP/MRP II/ERP outputs do not consist of detailed shop floor schedule Others (Please state)



D. INTEGRATION OF JIT AND MRP 1. According to your opinion, which following statement is appropriate?

(a) JIT is pull system while MRP is push system. So these two systems are totally opposite. They cannot co-exist in one firm

(b) JIT and MRP have different sets of strengths and weaknesses. Thus these two systems can complement each other and co-exist in one firm

(c) No idea about whether these two system can co-exist in one firm or not

If your answer for question 1 is (b) then proceed to question 2. If your answer is (a) or (c) then please proceed to the end of the survey 2. Is your company currently implementing both JIT and MRP systems [ ] Yes [ ] No If your answer for question 2 is yes then proceed to question 3 and 4. After that, skip question 5 and jump to the end of the survey. If you answer is no then please proceed to question 5. 3. Which one of the following situations describes more properly your company’s practice?

Vertically integrated hybrid - using MRP as a planning systems while using JIT as the shop floor execution system

Horizontally integrated hybrid - using MRP push system for some production stages while using JIT pull system for the other stages

Others. (Please state) 4. How do you rate the extent to which JIT and MRP hybrid system benefit your company?

Compared to using none of JIT, MRP, MRP II or ERP, hybrid system lowers inventory level

Compared to using JIT individually, hybrid system lowers inventory level

Compared to using MRP, MRP II or ERP individually, hybrid system lowers inventory level

Compared to using none of JIT, MRP, MRP II or ERP, hybrid system lowers the risk of shortage

Compared to using JIT individually, hybrid system lowers the risk of shortage

Compared to using MRP, MRP II or ERP individually, hybrid system lower the risk of shortage

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5. If you have not applied both JIT and MRP in your company, is your company willing to apply both systems in the future? [ ] Yes [ ] No [ ] Not sure If yes then which one would you prefer?

[ ] Vertically integrated [ ] horizontally integrated If no then please rank the reasons based on their importance. (1 is the most important)

Lack of a clearly defined framework for integration Complexity of the integration process Do not have experienced staff to be able to handle both systems Expensive to have two systems at the same time Others. (please state)

The end! Thank you very much for your patience in completing this survey.

jit vs mrp in the built environment, 94pp

Documents

le ha dung

unpublished

cebe working

unpublished

built environment

wood fibre

precast concrete

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