An Application of JIT and Lean Operations in a Manufacturing Company
Globalization of businesses has provoked the development of international supply chains. A Supply chain manages all the activities aimed at meeting the customer needs and maximizing the effectiveness of the process. This process starts from the extraction of raw materials to the customer receiving the finished good. Its aim is to satisfy the customer. Supply chain management aims at the company achieving a sustainable competitive advantage. This has initiated the application of just-in-time systems.
Just-in-time is an inventory scheduling technique. It was developed as an operations control and planning philosophy that assisted manufacturers attain consistent improvement in quality of products and productivity of the processes. JIT encompasses stock less production and zero inventories. It broadly focuses on elimination of waste from producing more than is required, waiting time, waste on transportation cost, inventory, processing and product defects throughout the organization.
JIT philosophy encompasses the following principles. The first principle is the operation excellence which requires the organization to be committed to continuous process and product improvement at all departments focusing on proper customer services. The second principle is value added processes which ensures that those processes that add no value to the customer or product are eliminated as they only add on cost of production; every aspect of the processes in the organization should be aiming at continuous improvement. Lastly, JIT techniques are focused towards total quality management and empowerment of employees (Ross, 2004).
Being the manager of a company that involves itself in the manufacture and marketing of personal computers, I am to incorporate the use of JIT and lean operations in the company. The income statement, balance sheet and balance scorecard will form the basis of my simulation. The pro forma statements and the budgets are conservative but very strategic. The company’s biggest worries were cash flow and debt level. It disregarded future productions and investments. Some of its operations were closed to save on money as the competition was not that high. The company did not take count of the probability of competition being experienced in the future.
Just in time focuses on efficient throughput, reduction in inventory and waste. The computer company took this a little bit far too far where it closed some of its operations. Closure of certain operations reduces the sales volume to the end of the last quarter. The competition was negligible but the computer company did not put into consideration global market strategies and future investments seriously. Waste was eliminated by maximum utilization of operating capacity. Leaving the plant that was closed could also have the company’s JIT increasing its throughput that took to move orders receipt to their delivery in other countries (Cheng & Poldosky, 1993).
Implementation of Just in Time technique would be by having suppliers who were supportive. If the company reduces the number of suppliers, it will facilitate the delivery of raw materials on a timely basis. This would also ensure the supplies are delivered to the specific work places. A work cell-based layout and machinery that were flexible would be an appropriate move. Proper organization of workplaces and reduced inventory spaces would ensure effective and efficient operations by the company.