Advantages Of Just In Time Management

a. After analyzing Pro-Forma Income Statement for all four quarter the utilization of Just-in-time strategy in Quarter 2-3 would have made Lean in Enterprises for more profitable. Since the premise of Just-in-time is to reduce waste and make sure that the supply chain is working efficiently to meet the customer demand. Just-in-time inventory is the minimum inventory necessary to keep a perfect system running. In Operation Management Heizer and Render define JIT inventory as the exact amount of the good arrives at the moment it is needed. (p. 2010) The ability to implement this strategy in Quarter 2 and Quarter 3 would have been very beneficial to the company expenses. The Just-In-Time strategy would have help the company avoid the $8,163 holding cost an excess capacity cost of $491,524. Just-in-time strategy would have prevented additional production after the product had low customer demand. Just-in-time would have also prevented the same waste

Shipments are continually late and there exists months of generation build-up, yet inventories of completed and in-methodology merchandise are taking off. Collectively they wonder why they can 't reliably get a quality item out the entryway on time at the cost that can beat rivalry.

Broyles, D., Beims, J., Franko, J., & Bergman, M. (2005, April). Academic Mind. Retrieved January 19, 2008, from http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html

A common way of decreasing the amount of inventory a business holds on a daily basis is implementing a just-in-time inventory process. A Just-In-Time inventory system means that the business gets the materials for a product, as they are demanded. “The electronic data

The larger amount of inventories holding may cause the inventories to become obsolesce or expire and there will be storage costs and other holding costs incur, so it is good to have smaller inventory

In the article, “Chrysler Averts a Parts Crisis,” by Jeffrey Ball, in the Wall Street Journal, readers get a small glimpse of how major businesses utilize just-in-time systems and how they may be impacted during a national crisis such as September 11th. Just-in-time is getting the right quantity of goods to the right place exactly at the right time. The goal is to get products at a certain place not too early and not too late, instead, just-in-time.(1) Just-in-time systems is an inventory strategy that is relatively simple to explain and understand. In order to fully understand just-in-time systems we must thoroughly define it and answer a couple key questions. First, how does a just-in-time system minimize warehousing costs? Second,

Lead production system was first introduced in 1940s by Taiichi Ohno at Toyota to reduce the cost of storage and the system was named as “Toyota Production System” (TPS) (Paton et al., 2011). Just in time (JIT) is a part of the popular TPS which is an inventory strategy that companies employ to make the exact number of items and only when they are required which is applied at every stage in a production chain. In other words, using a JIT supply chain system saves storage space by minimising stock on the premises. (Paton et al., 2011). This report makes an explorative study of the BMW’s supply chain which uses JIT as an operational improvement.

The Just in Time system however is a process that produces necessary products as required. This system is highly beneficial as it reduces the amount of inventory waste, as the goods are made to order. It also reduces warehousing costs as the goods are made and shipped directly to the customer rather than being held for extended periods at the warehouse.

The company also reduces inventory management cost by maintaining low inventory or just-in-time inventory which is a good technique to gain competitive advantage.

It might not be universally known but Toyota Motor Inc. pioneered the “Just in Time” approach to production. In a nutshell, “Just in Time” is an approach where a corporation depends on the natural flow of supply and demand to determine inventory level. The core principle of this approach is to receive supplies and goods as they are needed thus reducing inventory costs. Toyota depends on its accurate forecasts and ability to make decisions real time during production to make “Just in Time” approach be beneficial to both company efficiency and cost management.

Besides that, it also can help to reduce the waste .A high inventory turnover can prevents goods becoming damaged or obsolete while sitting in storage especially those goods which has short expire period. This can saves money by preventing investment in unnecessary stock, and reducing the need to replace old stock.

1- minimizes holding cost - Storing inventory is an expensive process for any business . The main advantage of this model is that it helps in decreasing the storage or holding cost of goods by getting at the optimum inventory level . If the holding costs are high in a firm then that firm may point to more orders of few items to reduce the cost

Furthermore, Just in time inventory is intended to avoid situations in which inventory exceeds demand and places increased burden on your business to manage the extra inventory.

As the inventory the organization store is merely enough to meet with individual order and there is a minimal stock is kept for re-working faulty product, so the organization have to minimize the error in production to the lowest. Also, with the limited stock, if any major strike or natural disaster will makes organization unable to serve their customer. Then, if a customer suddenly come with a large quantity of unexpected order, the organization might not able to serve them on time (“What is Just”,2016). Thus, it could lower down the ability of the organization to compete with their

Today, numerous companies are willing to keep or own their particular inventory in order to fulfil endless satisfaction of consumers. However, these stocks may be costly in terms of prices and their performance. For example, these stocks may be stolen, lost, damaged, out-dated, deteriorate and so on. They may also require huge number of capital to keep them in respective stores. Moreover, it may not be a wise way as changing demand in economy. After all, this action may occur financial loss to the business.