Book Reviews

Zero Inventories

by Robert W. Hall, copyright 1983, Dow Jones-Irwin

Reviewed by Sandy Friedman, CFPIM, CIRM

Hall describes in extensive detail the various facets regarding developing and implementing a stockless production environment, also known as Just In Time (JIT) production, while outlining the various benefits along the way. Zero Inventories begins by introducing basic issues, then moving on to detailed examples, concepts, as well as case studies, all of which illustrate concepts in stockless production with great clarity. Topics covered include forecasting, inventory control for distribution, management of manufacturing inventories, shop scheduling and control, and supplier networks. Zero Inventories is used as a classroom textbook, and is one of the recommended books for preparation for the APICS certification exams. A useful glossary of terms concludes the first chapter.

The material in each chapter addresses the basic principles of stockless production. Hall develops concepts and presents cases outlining results from flexible automation, reduction of setup times (including SMED, the Shingo Method Exchange of Die), small lot sizes, housekeeping, preventive maintenance, and perfect quality. Perfect quality is created by developing the manufacturing process to "do it right the first time," and involves no rework, no substitutions of tools or materials (configuration management of bills of material and bills of tooling), no overproduction allowing for normal scrap (i.e., attrition), no scrap for adjustments or "run-ins," and no damage in transit and handling.

Hall describes vendor/supplier relationships as being key to success in stockless production and zero defect attainment. Many examples and cases are cited from studies performed at Toyota of Japan, Kawasaki USA of Nebraska, and other prominent American, Japanese, and European companies. Hall characterizes suppliers as being "... remotely located work centers of the customer company... The objective is to design the physical process so that the supplier's last operation hands off material to the customer's first operation with as little wasted activity as possible. The real objective is for joint activity between customer and supplier to improve production operations at both locations," achieving "perfect quality -- within and between plants."

Hall's dissertation on Toyota manufacturing introduces the Kanban concept -- a "pull" strategy in which demand for material is pulled from each previous assembly area on a just-in-time basis, as opposed to a "push" system, in which material is delivered to the shop areas based on detailed schedules. In a push system, these schedules often lack accurate data on actual capacity, demand or machine requirements. Production Control personnel (a.k.a. expediters) are often required to level-load work areas since release schedules rarely reflect WIP status on the floor. Most production control organizations spend their time tracking the delta between detailed shop floor scheduling and the work that is actually performed, and adjust the activity as necessary to get "back on schedule."

In describing the benefits of the Kanban pull system, Hall states, "... the idea is to begin to draw parts to final assembly directly from fabrication as much as possible, and works basically as follows: plan a level final assembly schedule in advance; develop a master production schedule based on the final assembly schedule; explode the master production schedule using bills of material (and tooling); adjust the actual final assembly schedule to reflect deviations from plan caused by changes in customer orders and production problems; and provide a pull system to bring parts through the production operations to match demand." Kanban gets the "right parts to the right place at the right time," prevents ballooning of throughput time by controlling the amount of WIP inventory, and prevents the need to put inventory into stockrooms. Two major characteristics of the Kanban pull system include synchronization of materials movement to the rate at which it is withdrawn for use at the output, and limitations or constraints to the total amount of inventory."

Hall continues to describe techniques which act to support a level-loaded pull system. Market demand (make to stock, make to order) can be applied to the establishment of long-range planning, production planning, manufacturing production scheduling (1 year window), final assembly scheduling (day to day), and materials and fabrication scheduling requirements. A case study on Kawasaki, Nebraska, shows the need for three-day buffering for flexible rescheduling, to account for unpredictable conditions resulting from machine breakdowns, late part shipments, etc. "Planning and control systems... cannot be implemented unless the methods of production are designed to permit them. Much of the productivity benefit from stockless production comes from the revision of manufacturing processes."

Hall cites that 15-20% of benefits come from improved material planning and control, and the remainder from upgraded manufacturing processes and incremental worker effectiveness. Changes in manufacturing processes can result from reduction in machine setup times yielding increased flexibility, revised plant layout into group technology cells, regularly scheduled preventive maintenance, balancing of operations cycle times, and developing towards full automation. Group technology represents line balancing of actual processes, not just labor resources, and can help to reduce or eliminate WIP inventory between operations, promote visibility and quality, and create a more flexible and alert work force.

In Hall's discussion of quality, he cites studies by Dr. Edwards Deming, and expounds on what today is called Concurrent Engineering, a team approach toward the design, development, and delivery of "value engineered" products. Hall also applies significant attention to supplier networks, supplier quality, and vendor relationships, such that the supplier is akin to an off-site manufacturing area belonging to the parent company. An excellent case on Toyota explains how to build and maintain such a vertically integrated supplier network.

Zero Inventories effectively discusses nearly every facet of the topic of JIT/TQM. Robert Hall's book is used in many business schools and is highly regarded internationally as a baseline both academically and practically towards the understanding and implementation of stockless production environments.