Question

Explain the concept of just-in-time inventory management and its relationship to the lean production concept.

Answer 1

Just in time inventory management:-

• It is also called the Toyota Production System, JIT is a typical stock administration procedure and sort of lean approach intended to expand productivity, cut expenses and lessening waste by getting merchandise just as they are required.
• JIT was initially framed in Japan as a reaction to the nation's constrained normal assets, pretty much ruling out wastage.
• Today, Just in Time frameworks are utilized by numerous organizations, and it has impacted related lean stock administration procedures like IBM's Continuous Flow Manufacturing (CFM).
• The ascent of outsourcing has made JIT stock administration all the more engaging for retailers, as it enables them to offer an item before getting it, at that point buy the thing from an outsider and have it transported straightforwardly to the client.

JIT stock administration initially: the upsides and downsides:-

With the correct methodology, using a JIT stock administration system has various potential advantages for organizations:

1. Lower stock holding costs – with stock bought or delivered at short notice there's no need unsold stock taking up profitable distribution center space.
2. Enhanced income – without the need to store substantial volumes of stock consistently, capital consumption is lessened, and money can be contributed somewhere else.
3. Less dead stock – in light of the fact that stock dimensions depend on client request, there's less danger of undesirable stock left sitting in your distribution center.

On the other side, however, Just in Time stock administration isn't without its potential hindrances:-

1. Issues with request satisfaction – if a client arranges an item and you don't yet have it in stock, you risk not having the capacity to satisfy the request in an opportune manner.
2. No place for blunder – doing JIT right means having precise interest figures and experiences into clients' purchasing propensities consistently. Any miscount could have a noteworthy negative effect on business activities.
3. Value stuns – with a Just in Time framework, you don't have the advantage of sticking around at the best costs on merchandise. At the point when costs go up, overall revenues go down.

In the nick of time stock administration in real life:-

• JIT stock administration is utilized today by organizations in businesses extending from retail to cheap food to tech.
• Toyota is a standout amongst the most popular models of Just in Time fabricating essentially on the grounds that it was one of the first to actualize this technique adequately. Here are some different models of JIT in real life:

Apple:-

• This purchaser gadgets monster keeps as meager stock available as could be expected under the circumstances.
• By bringing down the measure of stock close by, Apple conveys a lower danger of overloading and chalking up dead stock in its distribution centers.
• As clarified by Tim Cook, CEO of Apple, "Stock is on a very basic level fiendishness. You sort of need to oversee it like you're in the dairy business.
• On the off chance that it moves beyond its freshness date, you have an issue."

Kellogg's :-

• Given that Kellogg's produces for the most part transitory merchandise, it shouldn't come as an unexpected that they utilize the Just in Time stock administration strategy as a proficient stock administration framework.
• Kellogg's ensures that simply enough items are made to satisfy requests and restricted stock is kept available.

Xiaomi :-

• Like Apple, Xiaomi deals with a little stock by discharging restricted amounts of its cell phones every week.
• The downside to this methodology is that energetic purchasers need to trust that the things will hit the stores – bringing about potential lost deals.
• In any case, Xiaomi still advantages from minimizing expenses and wiping out wastage.

Zara:-

• Zara exemplifies "quick design" by owning their inventory network and having the capacity to put up things for sale to the public phenomenally rapidly.
• The brand trusts that stock = passing.
• It submits a half year ahead of time to just 15 to 25 percent of a season's line.
• What's more, it just secures half to 60% of its line by the beginning of the season, implying that up to half of its garments are structured and produced right amidst the season.
• On the off chance that a specific style or configuration all of a sudden winds up prevalent, Zara responds rapidly by planning new styles and getting them into stores while the pattern is as yet cresting, fulfilling occasional interest and abusing changing client inclinations.

Tesla:-

• In spite of Tesla's sensational development in the previous couple of years, the organization is as yet one of the littlest car producers on the planet and can't freely appreciate similar economies of scale.
• Conversely, Tesla takes finish responsibility for store network and has been vocal in their dismissal of the conventional establishment merchant deals demonstrate.
• By keeping little stock and basically delivering on interest, Tesla can limit the measure of capital and hazard tied up with putting away overabundance stock.
• Furthermore, the hold up energizes extra customization, an excellent that a large number of their paid clients probably won't have paid for in the event that they could instantly drive a stock vehicle off the part.

Relation ship between JIT inventory management and Lean production:-

• Many befuddle the ideas of Just In Time (JIT) and Lean Manufacturing. Scott Thompson, columnist for the Houston Chronicle diagrams the contrasts between the two.
• Thompson expresses, "In the nick of time producing is centered around effectiveness, while lean assembling is centered around utilizing productivity to include an incentive for the client.
• In the nick of time assembling can be polished individually or as one stage in the lean assembling process."
• There are different ways JIT and Lean contrast. Lean is a total framework that can be utilized crosswise over business divisions including fabricating, creation, advertising, dissemination, and so forth.
• You can utilize Lean to make a JIT procedure yet JIT is the bit of the Lean technique that kills the misuse of unnecessary stock.
• JIT and Lean assembling have a fascinating history dependent on the car business.
• Prior to the JIT idea, makers made their items in surplus and frequently, well ahead of time of need. Henry Ford actualized JIT at a plant in Michigan.
• Press mineral was conveyed on Monday and was a piece of a completed vehicle three days after the fact.
• Portage saw the investment funds in having quite recently the perfect measure of stock touching base at simply the opportune time.
• Passage's work affected Taiichi Ohno, a Toyota official who considered the assembling procedure of the Model T. Ohno was additionally awed with American general stores and how they loaded stock.
• He thought it was substantially more effective than the vehicle business.
• Taiichi Ohno based on Ford's concept of keeping just the stock fundamental for generation and built up an exhaustive technique for decreasing waste, including esteem, and reinforcing benefit.
• After coming back to Japan, Ohno recognized the classifications of inefficient assembling rehearses which moved toward becoming to be known as the seven squanders:

1. Overproduction
2. Pausing
3. Transportation
4. Unseemly Processing
5. Over the top Inventory
6. Superfluous Motion
7. Imperfections

• In the nick of time creation and the ID of the seven squanders, alongside different instruments and procedures, turned out to be altogether known as the Toyota Production System.
• The Toyota Production System was effective and the expression "lean creation" was later instituted by a MIT explore group to depict the "progressive generation and administration framework" they distinguished at Toyota.
• On account of two vehicle symbols and their execution of JIT and Lean, associations have two devices to make more effective and beneficial procedures.