Lecture Purchasing and supply chain management (3rd/e): Chapter 6 - W. C. Benton
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Chapter 6:
JustinTime (Lean)
Purchasing
Purchasing and Supply Chain Management
3rd edition
Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013
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The Two Rival Production systems
1.
MRP production systems
2.
Justintime (JIT) manufacturing
•.
Popularity of JIT
•
JIT conversion success testimonials
•
HarleyDavidson and HewlettPackard
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Justintime (JIT) Philosophy
•
•
•
Justintime (JIT) is not just a set of tools but rather a
philosophy
The JIT philosophy is based on:
•
Elimination of waste
•
Continuous improvement
Example of the JIT philosophy applied to a firm
•
Justintime (JIT) production
•
Justintime (JIT) purchasing
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Justintime (JIT) Production
•
•
A powerful management tool
•
Based on planned elimination of all waste and on continuous
improvement
•
Also referred to as lean production
•
Applied to repetitive manufacturing processes
Reduces:
•
Inventory levels
•
Variability
•
Delivery lead times
•
Setup costs
Thus, improving product quality
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
•
Definition of Lean Production System
•
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A set of several manufacturing practices
including:
•
Worker empowerment
•
Process focus
•
Pull production
•
Continuous improvement
The main objective:
Satisfy customer needs on the highest possible level
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
through the elimination of waste
•
Push and Pull Production Systems
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Alternative systems for executing the production process
•
•
When should the next unit of production be made?
The three systems:
•
Push system
•
Pull system
•
Hybrid production
•
Combination of push and pull
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Determining the Number of Kanban Cards
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Example: Number of Kanbans
•
How many kanbans are required for the bottling
process?
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Average of 90 bottles/hour output (d)
•
Container size of six bottles (C)
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Lead time of 20 minutes (L)
•
Safety stock level of 10 percent (S)
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
JIT Purchasing Advantages
•
Reduced inventory levels
•
Improved leadtime reliability
•
Scheduling flexibility
•
Improved quality and customer satisfaction
•
Reduced costs of parts
•
Constructive synergies with suppliers
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Justintime (JIT) and Environment
•
•
Cultural Fit
•
Need a culture that facilitates cooperation and harmony between
organizations
•
For example, difference between corperate cultures of Japan
and USA
Low Variability in Demand
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Questions?
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
