One of the major risks for the JIT strategy is when there is instability in the environment. For example, in the case of September 11, the airplane paralysation led to a major interruption of material transportation locally and internationally. Furthermore, the 2011 earthquake in Japan affected both the automobile and mobile industries. In such situations, stock-out costs can exceed carrying costs, which is the main foundation for a leaner inventory system. The question then arises; should companies continue to use JIT in the event of major uncontrollable environment occurrences? According to Srinidhi and Tayi (2004), companies that are flexible enough and are able to change from a JIT system to a traditional inventory system will have a competitive advantage over other firms who do not switch. In such uncontrollable environments, the major benefit of JIT becomes a handicap with the increase in delivery times and the added data handling and coordination required in such times. This leads to a decrease in quick response time, which ultimately leads to increase in costs to the firm. During hard economic times it may be possible for a firm to switch suppliers be it from domestic to international or vice-versa for some required materials. However, this might not be desirable for all materials. Another issue that often occurs is the delay in shipment with the transportation companies. This may require that certain parts be divided into smaller batches and shipped separately, which would increase the lead time and shipping costs. A perceptive company with an ‘agile’ system can rapidly identify an alteration in the environment and gather useful information to quickly respond and avoid a major internal impact. This agility to quickly r... ... middle of paper ... ... 2005 are not all that rare. Other issues of political nature create a large amount of uncertainty in supply chains around the world. Therefore, companies need to be aware of this and reduce their risk by maintaining relationships with alternate suppliers. Another effective way to reduce risk is for companies to purchase business-interruption insurance. This type of insurance used to be generally easy to obtain. Today, insurance companies require a lot more information before providing the service to companies. Not only do they require more information on a company's suppliers, the insurers also require that you have a list of multiple suppliers that, if an isolated disaster or accident occurs, wouldn’t all be affected. Companies need to maintain their JIT processes, eliminate redundancies, and at the same time keep a minimum number of suppliers to minimize risks.
Currently the primary struggle for the integrated manufacturing employees at Stryker Instruments is to meet the assembly lines demands. This struggle originates from operating under a just in time delivery system. J.I.T. delivery is a manufacturing strategy that attempts to improve a business' profitability by reducing in-process inventory and the costs associated with extra inventory, such as the taxes that are charged to all of the inventory that Stryker instruments has in stock. The process relies on clear communication between the various points in the manufacturing and assembly processes. For J.I.T. delivery to work properly, the assembly line should relay what components are being consumed to the manufacturing work centers located in integrated manufacturing. This signals the integrated manufacturing team to replenish the supply of certain high demand components.
• Small manufacturing plant. • Not enough number of workers. • Two (2) separate facilities that are miles apart. • Costly deliveries. • No inventory and checkout list.
Based on future supplier contracts, shortening lead time for delivery of parts and materials establishing leaner processes, namely addressing wastes identified through implementing a Just-In-Time (JIT) system. A centralized wharehouse system, co-located near the manufacturing plant will reduce shipping and transportation costs or look for larger space with warehousing capacity. Savings, significant enough will be a factor if space with warehousing falls within the
Lin, Yong and Li Zhou. "The Impacts of Product Design Changes On Supply Chain Risk: A
middle of paper ... ... Reduce overhead costs of working with JIT based customers by. o Consider implementing JIT production and inventory methodology. o Reduce order handling overhead by implementing standing JIT orders (i.e. one order for a total quantity over time, instead of a separate order for each delivery).
It is basic in the present society for each business, vast or little, to create and keep up a Business Continuity/Disaster Recovery Plan (BC/DR). This sort of plan is fundamental to the proceeded with the operation of your business and gives a stage to recover from an overwhelming occasion. Likewise, with any emergency plans you create, it can be best summed up with the relationship is that It is there to remind you how to think when you are set in a position where it's difficult to think and Something that everybody can identify with. There are numerous segments to be incorporated into a BC/DR Plan, a large portion of which are altogether outfitted towards distinguishing the essential resources that keep the business running, recognize procedures
In the competitive environment, it is necessary for moving products involves reception of products at an intermediate location, store, repackage, clear customs and transport to final destination. The other factor in the supply chain logistics is speed given information flows fast in the internet era. The customer expects everything quick accustomed to the instant status access to the information. With the real time inventory, customer expects the location of the product, it is next scheduled movement and the final delivery schedule.
Ray, S., & Black, T. (2011, March 24). The Downside of Just-in-Time Inventory. Retrieved Janurary 14, 2014, from www.businessweek.com: http://www.businessweek.com/magazine/content/11_14/b4222017701856.htm
Conclusion Overall, the consequences of not having a Disaster Recovery and Business Continuity Plan can become costly in the event of a disaster. Most companies will find themselves in financial disarray when having to rebuild and/or replace any portions of the IT infrastructure that were destroyed during a disaster event. Hence, companies invest in insurance to cover such costs; however, there must be a balance because even with insurance an organization may still incur high expenses. Having a good disaster recovery and business continuity plan will keep your company up and running through any kind of interruptions such as power failures, IT system crashes, natural or man-made disasters, supply chain/vendor problems and more.
“Must have JIT experience”, “What?” I did not know what it was, or meant. Just In Time (JIT) is the production process rooted on the basis of the system working just when and as it is needed, while attempting to eliminate waste. JIT is designed to keep inventory costs down, by eliminating large inventory. The concept is to have manufacturing parts arrive just in time to be picked then assembled, and arrive just in time for the customer’s use.
Inventory management is a method through, which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle from the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seeing more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company;
Inventory management system has been practiced in many organizations from various industries. Given the diverse and multi-layered supply chains handling different inventories, organizations utilizing inventory management system can still manage efficiently and effectively their supply and demand flow within crucial transactional activities. In the following discussions, this paper examines the concept of inventory management, different inventory types and inventory management processes, and the function criteria to be considered when selecting inventory management system. Inventory is comprised of an ideal resource of any form that has potential economic value and regarded as locked up capital (Saxena, 2009). From the materials management perspective,
Every year, new technologies, markets and competitors emerge causing leaders to rethink how to adapt to the pace of change. In order to create a leadership organization who can demonstrate agility not only in the top level but also in all levels, it is important to ensure strategic and tactical goals are set properly in all levels. The leaders should be connected closely with the customers, with the products, with the core functionality of the business. The connection deepens the understanding of the business value and help steer the agile framework, design quality and manage IT governance. This
19. Sodhi, Sunil Chopra and ManMohan S. Managing Risk to Avoid Supply Chain Breakdown. MITSloan Management Review. [Online] October 15, 2004. [Cited: February 25, 2010.] http://sloanreview.mit.edu/the-magazine/articles/2004/fall/46109/managing-risk-to-avoid-supplychain-breakdown/.
One of the most famous systems for supervising inventory in the manufacturing environment companies is just in time, or JIT, inventory control. JIT pursue to distribute inventory to the production line just in time for use. The JIT technique convey only the definite quantities needed to accomplish the current production goal; no more, no less. JIT inventory control is deeply dependent on the capability of the business suppliers to transport on demand. In most manufacturing environments companies take advantage of JIT delivery, the supplier has a storehouse very close to the manufacturing area (Whitin,