Question

Identify the inventory tactics appropriate for a JIT environment. Be specific.

Answer 1

JIT Environment:- JUST IN TIME, it is an environment wherein strategically companies employ inventory ideas so that efficiency is increased with decrease in waste. This is done by receiving material as & when they are needed in production, which helps in reduction of inventory costs. In order to do so, producers are required to forecast demand accurately & hence reduction in cost.

This is most commonly practiced & experienced in automobile industry. It aims at basically reducing the flow times with reducing the response time frames from suppliers & other vendors.

Following are few inventory tactics for JIT environment:-

1. Networks of suppliers which acts as extensions of factories.
2. Design for processes, fitness as per use & production.
3. A compact layout of the plant which is product oriented.
4. Flexible set-up’s which leads to easy changeovers processes.
5. Safety measures which has preventive maintenance at the warehouse.
6. Elimination of defects by making the product right in first time.
7. Multifunctional & cross functional workers with developed skill set.
8. Flexible communication channels.

The major disadvantage of JIT is, if any supplier shuts down & is not able to deliver as & when needed then the entire production gets stopped due to the fact that one product is not readily available & hence production cannot move forward. An unexpected rise in demand, can also cause a halt in production as supplier might not have the side product in bulk that can cater the unexpected need.