File Name: just in time and just in case .zip
Just-in-case manufacturing JIC is a term sometimes applied to traditional manufacturing systems used before the influence of modern technologies and newer transportation infrastructures. It is the contrary in many ways to the recently evolved just in time manufacturing system. In JIC, manufacturers need to maintain large inventories of supplies, parts, warehousing resources, and extra workers to meet production contingencies.
Learn More. Just-in-Case JIC is an inventory management philosophy that prioritizes risk management, often in the form of larger standing inventories. JIT aims to optimize the lean method by reducing 7 wastes in manufacturing, while JIC prioritizes minimizing the chances of goods running low in stock or falling behind the production schedule required to fulfill orders on time.
In the current uncertain political and economic environment, companies need to adapt their supply chain to deal with uncertainty. Developing better ways of dealing with supply chain disruptions is particularly important since sustainable competitive advantage is often driven by speed, delivery and cost-reduction. Whether intentional or due to natural catastrophe, these disruptions for businesses usually go straight to the bottom line.
What makes disasters and the resulting business disruptions particularly significant today is the emphasis on speed and efficiency. This is generally epitomized in the Just-in-Time system of delivery of materials and components that was pioneered by Japanese manufacturing firms.
This technique requires inventory to arrive at the production lines precisely when it is needed. In the s, a few U. As a result, Just-in-Time concepts have now been widely adopted across both traditional and high-tech industries in the United States and Europe. The inventories of both raw materials and finished goods have been dramatically reduced for these organizations, thus making capital available for more profitable uses.
However, shortages caused by natural, political or technological disruptions can erode productivity and even bring business to a halt, thereby causing customers to defect, never to return. The potential for supply-chain disruptions means business operations are less predictable than most managers believe. Existing supply chain technologies were primarily designed to reduce the friction in the flow of materials, components, and finished goods across the enterprise and its global supply chain.
When these systems were introduced, the level of global uncertainty both politically and economically was not the consideration it is today. Beyond these experiences, the catastrophe of September 11, , and the continuing threat of deliberate disruption have also changed the environment.
According to recent research, firms are not prepared to manage the risks that could hit their supply chain in the event of a local, national or global crisis. Additional surveys by the Chartered Management Institute  and the Business Continuity Institute show that there is evidence of significant disruption to organizations from a number of crises in the late s through Furthermore, according to this survey data, there seems to be an escalation in the number of disruptions, but little change in contingency planning.
How can business practitioners effectively deal with these risks and capitalize on the opportunities? One way is to learn from company responses to previous catastrophic events. Table 2 outlines a brief comparison of some significant events from the late s to the present. Transportation : Examination of this comparison shows the importance of lining up alternative transportation.
While such a strategy may seem obvious, the examples of Diamler Chrysler versus Ford indicate that unfortunately, even large, profitable companies may not have alternative transportation strategies. The attacks of September 11 immediately prompted tighter security at all U. Ford suffered from not being prepared with alternate transportation for critical components. In contrast, Chrysler responded quickly to the restrictions on air travel after September Chrysler turned to a truck service to minimize the delay in delivering the component.
Continental Teves, a large supplier to the auto industry, similarly demonstrated agile supply chain management. Their crisis team, composed of purchasing and logistics managers, immediately put together a list of all customers, parts, and suppliers outstanding.
By the afternoon of September 11, they knew which North American shipments required immediate action and expedited many of these by land. As these events make clear, manufacturers and suppliers must have the flexibility to expand their contingent shipping arrangements. In this regard, logistics software can help by tracking goods globally and providing guidance when disruptions occur. Those that ship via one mode of transportation should consider backup routes by another mode.
Sourcing Alternatives : An examination of these comparisons reveals the importance of cultivating alternate sourcing arrangements.
Relying heavily on a single source for products or critical components leaves a firm highly vulnerable to prolonged and expensive supply gaps. Again, this may seem like common sense, but many firms have not considered enough alternative sourcing scenarios. The Hurricane Mitch crisis is a good illustration.
Chiquita Brands was able to maintain a steady supply of bananas even though it lost production from its own Central America plantations.
It met volume requirements through increased productivity in other locations, such as Panama, and purchases of fruit from associate producers in the region that were undamaged. Leveraging Technology : The evolution of the supply chain in recent years is characterized by a move toward modularization and customer relationship management CRM integrated application suites.
Technology vendors were moving from tightly integrated inter-enterprise suites to modular applications with a narrower focus. Modular applications with a narrower focus reduced implementation risks and costs significantly.
However, they also increased the potential customer pool for software companies by bringing in small and medium-sized enterprises that were previously excluded due to the price of the software. The evolution of technology and customer relationship capabilities provides an opportunity for managers to mitigate risks even in the worst of circumstances when supplies are just not available, provided the supply chain system is contemporary and not too thin.
This new conceptual strategy for mitigating supply chain disruption is to influence customer choice. Traditionally companies have created product lines that represent their best guesses about what buyers will want. There were generally some alterations possible at the purchase point, but choices were largely fixed. However, since the mids, more and more companies have developed the ability to tailor in real time the options presented to the buyer and to promote certain features over others through their digital networks.
This ability to dynamically influence customer choices is particularly powerful in times of crisis, as is seen in the way Apple and Dell dealt with the Taiwan earthquake in This earthquake cut power, damaged factory equipment and halted the supply of critical PC and laptop components for two weeks. In this case, the problem could not be resolved with alternative forms of transportation or different sources of supplies. Apple faced shortages of semiconductors and other components that delayed production of its iBook and Power Macintosh G4 desktop computers during a period of growing demand.
The company was unable to alter product configurations, but it decided to ship slower G4 comptuers than the customers had ordered and received a barrage of complaints. Dell on the other hand fared much better. Resilience in responding to customer demand is critical for surviving in a risky economy that demands speed and flexibility. Many companies have spent decades trying to get their supply chains to flow smoothly through just-in-time concepts.
However, these ultra-lean strategies have significant risks in a turbulent economic and political system. Each component in the supply chain, from sourcing to inventory to transportation and demand management, must be reassessed based on the current situation and careful consideration of risks.
Furthermore, since these situations change so quickly, the supply-chain system needs to be rebalanced periodically as new information and new risks are identified. New ways of leveraging the information networks to mitigate risk represent a critical and new component of business continuity planning. This means paying as much attention to demand management and information sharing with internal and external customers as it does to logistics. However, the benefits are not just in risk-mitigation.
This strategic approach incorporates competitive goals such as anticipating and even influencing shifts in customer priorities and creating advantages over rivals that are rigid in procurement, transportation and operations. Large-scale disasters remind us that the frictionless economy is a just a dream, not a reality.
No one can predict where the inevitable next disaster will occur or what will happen. Mitigating risk entails a high cost and sometimes constrains performance, so these things must be balanced. However, businesses can succeed with agile supply chain management, particularly by leveraging customer relationship management and other related technologies to influence customer choice. New do-not-call regulations make telemarketing more difficult and less profitable for businesses, but permission-based direct marketing is an effective tool.
Special Purpose Entities SPEs have a useful role in business financing, but there must be transparency, and all parties must understand the risks.
Little ones and executives have a lot in common: Both have short attention spans and some are given to temper tantrums. This study examines measures of customer satisfaction is six countries within South America: Argentina, Brazil, Chile, Colombia, Peru, and Venezuela over the five-year period through As the role of the customer becomes more and more important to the sustainability of the firm, effective allocation of resources will provide a significant advantage to customer service organizations.
The Evolution of Supply Chain Design Existing supply chain technologies were primarily designed to reduce the friction in the flow of materials, components, and finished goods across the enterprise and its global supply chain.
Where Do U. Firms Stand Now? Lessons from the Previous Disruptions How can business practitioners effectively deal with these risks and capitalize on the opportunities?
Back to top. Share Facebook. Author of the article Author's profile. In , Dr. Griffy-Brown received a research award from the International Association for the Management of Technology and was recognized as one of the most active and prolific researchers in the fields of technology management and innovation. A former researcher at the Foundation for Advanced Studies on International Development in Tokyo, she has also served as an associate professor at the Tokyo Institute of Technology.
More articles from Volume 6 Issue 2. Do Not Call! Livingstone, PhD Organizational Behavior. Just-in-Time to Just-in-Case In the current uncertain political and economic environment, companies need to adapt their supply chain to deal with uncertainty. Special Purpose Entities Special Purpose Entities SPEs have a useful role in business financing, but there must be transparency, and all parties must understand the risks. By Peggy J. Crawford, PhD and Edward H. Fredericks, Jr. Editorial: Shock and Awe Little ones and executives have a lot in common: Both have short attention spans and some are given to temper tantrums.
It is also producing over reactions from people determined to make them stop. Consider the curiously vexed debate about how to get materials to, and work in process through, the shop floor. Pick up virtually any manufacturing magazine these days […]. Pick up virtually any manufacturing magazine these days and there will be some articles and pages of advertisements by consultants extolling the virtues of JIT over such computer-driven control systems as materials requirements planning MRP or materials resource planning MRP II —as if JIT principles were opposed to MRP and to the use of computers. An MRP II program promises manufacturing managers more precision than it can deliver, requires unnecessary information, and demands more formal discipline than the shop floor needs.
Traditional approaches to stock control rest on the basis of batch production techniques used in manufacturing. Raw materials are bought, processed and stored in batches. Not much emphasis is placed on establishing a flow of production, often as a consequence of relatively low, or inconsistent, demand patterns. This clearly has significant implications on the methods of stock control that they apply and their approach to lean production and quality assurance. Just-in-case is a production and distribution system, with buffer stocks held at every stage in the production process 'just in case' there is a production problem or demand rises unexpectedly. Stocks of raw materials, components, work-in-progress and finished goods are held by the producer to ensure continuous production.
In the current uncertain political and economic environment, companies need to adapt their supply chain to deal with uncertainty. Developing better ways of dealing with supply chain disruptions is particularly important since sustainable competitive advantage is often driven by speed, delivery and cost-reduction. Whether intentional or due to natural catastrophe, these disruptions for businesses usually go straight to the bottom line. What makes disasters and the resulting business disruptions particularly significant today is the emphasis on speed and efficiency. This is generally epitomized in the Just-in-Time system of delivery of materials and components that was pioneered by Japanese manufacturing firms.
Demand-pull enables a firm to produce only what is required, in the correct quantity and at the correct time. This means that stock levels of raw materials, components, work in progress and finished goods can be kept to a minimum. This requires a carefully planned scheduling and flow of resources through the production process. Modern manufacturing firms use sophisticated production scheduling software to plan production for each period of time, which includes ordering the correct stock. Information is exchanged with suppliers and customers through EDI Electronic Data Interchange to help ensure that every detail is correct.
Just-in-time JIT inventory management, also know as lean manufacturing and sometimes referred to as the Toyota production system TPS , is an inventory strategy that manufacturers use to increase efficiency. The process involves ordering and receiving inventory for production and customer sales only as it is needed to produce goods, and not before. This type of inventory management provides many benefits, but is not without its downsides, and relies heavily on factors such as a strong, fast and efficient network of suppliers. This strategy helps companies lower their inventory carrying costs , increase efficiency, and decrease waste. JIT requires manufacturers to be very accurate in forecasts for the demand for their products. Just-in-time inventory management is a positive cost-cutting inventory management strategy, although it can also lead to stockouts.
Just-in-time JIT manufacturing, also known as just-in-time production or the Toyota Production System TPS , was first developed and perfected within the Toyota manufacturing plants by Taiichi Ohno, is a methodology aimed primarily at reducing cycle times of various activities within production system as well as response times from suppliers and to customers. JIT is a common inventory management technique and type of lean methodology designed to increase efficiency, cut costs and decrease waste by receiving goods only as they are needed. Its origin and development was in Japan, largely in the s and s. Its purpose is to minimise the amount of goods you hold at any one time without compromising the production volumes. Less stock levels also means lesser investment.
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