1. The process of Just-In-Time (JIT) inventory management was first introduced in the auto industry to eliminate wastes and improve efficiencies. According to the text, just-in-time is used to assist companies in analyzing operations to discover better ways to work (Vonderembe & White, 2013). In other words an approach to achieve excellence in different industries based on continuing to eliminate waste (waste is considered things which do not add value to the product). JIT refers to the movement of material at the right time and the right place.
JIT has led to many companies adopting standard work or standardized processes throughout to eliminate non value add work and improve efficiencies. Non value add or waste come in many forms: waiting, over producing, rework, excess motion, over processing, inaccurate inventory levels, and transportation (Vondermebse & White, 2013). Companies like my current employer seek to benefit from lean manufacturing using JIT to reduce direct/indirect labor and space requirements. In addition, the company thrives to increase quality, responsiveness, innovation, flexibility, and employee enthusiasm using lean practices.
While the auto industry and other OEMs are suited for JIT it is not always appropriate. Advantages to using JIT are when the scope and boundaries of a problem are clearly defined and understood or when results are needed immediately (i.e. capacity constraints). According to Kuzma (2011) people often times dive into ideas to solve problems with understanding the root cause or without completely understanding the idea (Kuzma, 2011).
An example of when JIT is not appropriate is in the healthcare industry. Although some of the methodology can be applied to eliminate wastes and improve efficiencies. JIT inventory is not appropriate in a hospital setting and having supplies on hand could mean the difference between life or death. This constricts the ideology behind being lean or utilizing JIT processes. This could also translate into other emergency care associations like the Red Cross or FEMA. In these companies having inventory on hand is somewhat the point of the organization. In a crisis supplies and talented workers are available and having the right amount of inventory is unknown based on the patient, natural disaster, etc.
However, there are innovative ways to solve some of the pressures of overstocking products. According to Wardlaw (2015) hospitals are creating new ways to manage inventory such as designing nurse server stations. This is a minicloset in each room with stocked items that are used often (Wardlaw, 2015). Without proper supplies on hand could mean more disruptions in a hospital setting compared to automotive or the manufacturing environment. However, JIT may not be appropriate in healthcare, but being creative and using the lean methodology can be useful in certain areas.
Kuzma, D. (2011). When JIT Gives Lean a Bad Name. Material Handling & Logistics, 66(7), 20-22. Retrieved from http://eds.b.ebscohost.com.proxy-library.ashford.edu/eds.
Vonderembse, M.A. & White, G.P. (2013). Operations Management . San Diego, CA: Bridgepoint Education, Inc.
Wardlaw, W. (2015). 8 PATHS TO BETTER HOSPITAL DESIGN. Industrial Engineer: IE, 47(2), 29. Retrieved from http://eds.b.ebscohost.com.proxy-library.ashford.edu/eds.
2. Choose companies or industries for which JIT would be totally inappropriate?
I believe the medical industry would not be a good fit for a just in time system. It makes more sense to have a sufficient inventory of medications along with any other medical related items because we do not know what the future holds. I can’t imagine if an outbreak or disaster happened and we only had enough medicine to cure a handful of people. You can never have enough of these types of things especially given the shelf life of most medications. The oil industry is another field where a just in time system would not work. As a society we depend too much on oil for there not to be a sufficient amount. When reserve is low it affects everyone and ultimately the consumer pays the price. I remember when the BP oil spill happened and how much this disaster affected everything. Another industry that a just-in-time system would not be appropriate is the custom industry. If every order is a custom one then it’s going to be a constant change and no need for a just in time system. Although the just in time system make sense for most industries these are the some that I feel could be inappropriate or challenging.
3.Scheduling is collaborating orders to ensure availability of products to deliver optimum customer service. Scheduling has improved with new technology, which has significantly increase productivity such as working ahead to limit movement of equipment and materials. The main objective in scheduling is to reduce inconsistencies to reduce downtime or disruptions in service. The duties of scheduling include timely delivery of products or materials to customers, regulating inventory, requisitioning products, and coordinating with vendors to meet quantities and related ship dates (Vonderembe & White, 2013).
There are multiple scheduling methods and each requires a different type of scheduling procedure. For example, in seasonality businesses like water sprinklers schedules are performed using peak demand schedule. This means products with seasonal demand cycles build up inventory in advance of periods of peak demand. A company I worked for used this method of scheduling using work orders or repetitive schedules to build requirements to ramp up inventory (based on forecasted sales) prior to expected demand. Peak demand allows companies to plan and prepare resources, materials, equipment, etc. for capacity of products in inventory and a seasonal inventory quantity needed by a certain date.
A separate type of demand scheduling is chase, which sets production equal to forecasted demand. Chase strategy is used in the fast food industry. Klassen (2001) explains chase demand as planning capacity to meet demands and maintain capacity to sustain orders. The risk with chase demand strategy is the business is doing just that chasing demand. In this case the demand can be constant or limit customer service with higher wait times. This can cause significant fluctuations in demand and potentially loss of business (Klassen, 2001).
Lastly, appointment or reservation scheduling, which is used in airline industries for scheduling the number of shifts to be worked by the airline, times for each shift, and can be compared to other airlines. Furthermore, holidays and normal hour schedule expectations can be observed to meet customer needs on demand.
Scheduling methods vary based on the type of service and should be applied to meet customer demands. In the manufacturing environment it would not be feasible to use reservation scheduling. Scheduling based on reservations or appointments would lead to sale and customer losses based on a lack of products available. Additionally airlines would not use chase demand as it would lead to wasteful resources. Scheduling based on the type of business and products provided is important when creating schedules.
Klassen, K. J., & Rohleder, T. R. (2001). Combining operations and marketing to manage capacity and demand in services. The Service Industries Journal, 21(2), 1-30. Retrieved from http://search.proquest.com/docview/203340372?accountid=32521.
Vonderembse, M. and White, G. (2013). Operations Management. San Diego CA: Bridgepoint Education, Inc.
4. Service providers such as hospitals, restaurants, and airlines are very limited on the types scheduling that can occur to make their performance efficient. Excess demand in these types of organizations cause long wait times for customers and are disruptors to smooth operations. According to (Vonderembse & White, 2013), “Because most service operations cannot store finished goods, they try to resolve excess demand problems with extra capacity or by rationing capacity” (Chapter 12, section 5).
Restaurants and airlines may mitigate this excess demand by using the technique of scheduling for peak demand. This approach in scheduling usually meets the demand under normal conditions, but may result in a major part of capacity being idle for long periods of time (Vonderembse & White, 2013). Adjustable capacity could also be used for restaurants which would shut down low demand sections during off-peak times and allow staff members to achieve other tasks (Vonderembse & White, 2013).
Hospitals may use more of a job shop technique and dispatching rules such as “first-come-first-serve” scheduling procedures (Vonderembse & White, 2013). This technique is simple to use because the information is easily accessible all while making it unnecessary for work centers to know what the other is doing (Vonderembse & White, 2013). Some hospitals are turning to personnel scheduling software in order to increase their operating proficiencies. According to (Anderson, 2008), “In addition to improving overall staff productivity, hospital executives say the applications help them carry out the terms of union contracts, comply with state regulations regarding nursing staff levels, cope with the nursing shortage while holding down staff costs, and accommodate employee self-scheduling” (p. 38).
Anderson, H. (2008). Better Scheduling Boosts Productivity. Health Data Management, 16(7), 38-40. Retrieved from: http://search.proquest.com/docview/219568001?accountid=32521
Vonderembse, M., & White, G. (2013). Operations management. San Diego, CA: Bridgepoint Education, Inc. Retrieved from: https://content.ashford.edu/books/AUBUS644.13.1