Question

Logestics Management Ch7 "Just-in-time and the agile supply chain" Based on this chapter answer the following.

1. Why Companies adopted Lean Thinking and JIT model?

Answer 1

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Why Companies adopted Lean Thinking and JIT model?

Lean thinking refers to a business methodology that uses the concepts of value, flow, and value stream to provide better thinking hence improving the quality of services and products delivered to the people in the society. This is also done by reducing waste and also reducing the negative impact that waste has on the people. Lean thinking also focuses on creating a lean enterprise where employee and customer satisfaction is fully considered, innovative and quality products and services, and even reduction in unnecessary costs. The primary goal of any business is to fully satisfy its customers' needs in order to help in the overall growth of the company. This can only be done through quality production, be socially responsible, employee and customer satisfaction, and innovation. Lean thinking helps in achieving the above growth factors and hence leading to the growth of the business. In addition,full satisfaction of the customers’ needs creates a competitive advantage for the business, which means that there are customer loyalty and customer retention. Generally, companies that adopt lean thinking end up reducing production costs, improving profit margins, improving customer relations, improving productivity, and even keeping up with the advancement in technology, which will eventually help in the growth of the business.The Just-In-Time model is a management system where suppliers’ raw materials are aligned with the production schedules. This strategy helps in increasing efficiency by reducing waste. This is done by ensuring that goods or raw materials are requisitioned based on how they are needed in the production process. This strategy generally reduces inventory costs, which eventually reduces the production costs. A reduction in production costs later reduces the selling cost of that particular product or service. Most companies adopt the JIT model because it is more beneficial than the traditional model. Some of the benefits of the JIT model include; manufacturers are able to increase their production since this model has short production runs. This model also reduces the need for a warehouse hence reducing the production costs. In addition, companies end up spending less on the raw materials since they only acquire the resources enough to deal with the current orders

Conclusion - In my opinion, many companies are reaching out to embrace the Lean Thinking and JIT model to produce their product with the least amount of waste, increasing production only as needed, and recycling and reusing items when applicable. This allows the suppliers as well as the end users to benefit the cost saving of stocking inventory while meeting the demand of the product offered. During the current crisis of COVID 19 we see more companies are striving to achieve this mode of operation. For example, the high demand of cleaning products and protective masks for our hospitals and clinics. This opinion stands from observing our current market and global situation.

ALTERNATIVE ANSWER:

Lean concept was utilized by firms so as to minimize any wastes. This was done by the elimination of the activities that do not add value to the product. For instance, when it comes to the production of motor vehicles there are some activities that add value and others that do not add value. For instance, the wrapping of the car and wiping it while in the warehouse awaiting delivery does not add value. However, its customization to meet the specific needs of the clients add value. Therefore, the main function of lean concept is to enhance relevance in production by prioritizing activities and aspects that directly contribute to value addition.

Conversely apart from learn thinking, the other important concept that was adopted by firms is the JIT concept. The main reason as to why firms adopted the JIT model is because of the need for timely delivery of inputs for manufacturing. Apart from that JIT model also helps in ensuring that the manufactured good is delivered on time. Given this case, the application of JIT model helps in the elimination of the holding costs of raw materials and costs of inventory. An example of a firm that has been found to be aggressive in the use of the JIT model is Toyota Motor Corporation. The benefits that was derived by this entity from the utilization of the model is that it helped in the reduction in lead times and costs related to inventory. Therefore, the main reason as to why firms adopted the JIT model is so as to cut on costs and minimize the lead times.

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