Benefits of JIT
• lower stocks of raw materials and work in progress
• shorter lead times
• shorter time needed to make a product
• higher productivity
• higher equipment capacity and utilisation
• simplified planning and scheduling
• less paperwork
• improved quality of materials and products
• less scrap and wastage
• better morale and participation of the workforce
• better relations with suppliers
• emphasis on solving problems in the process.
Disadvantages of JIT
• high risks of introducing completely new systems and operations
• initial investment and cost of implementation
• long time needed to get significant improvements
• reliance on perfect quality of materials from suppliers
• inability of suppliers to adapt to JIT methods
• need for stable production when demand is highly variable or seasonal
• reduced flexibility to meet specific, or changing, customer demands
• difficulty of reducing set-up times and associated costs
• lack of commitment within the organisation
• lack of co-operation and trust between employees
• problems linking JIT to other information systems, such as accounts
• need to change layout of facilities
• increased stress in workforce
• inability of some people to accept devolved responsibilities.
Efficient consumer response (ECR)
• This extension of JIT along the supply chain is known by a variety of names, including quick response (QR), continuous replenishment planning (CRP) and more commonly efficient consumer response (ECR).
• Efficient consumer response (ECR) pulls materials through tiers of organisations in the supply chain.
Features of ECR
• With JIT this came with kanbans; with ECR it came with Electronic Data Interchange (EDI).
• This allows full EDI including purchase orders, invoices, planning information, point-of-sales data, fund transfer, and so on.
• Each organisation’s control system sends a message to suppliers and signals the need for more materials using an ‘electronic kanban’.
• Some systems go further and hand over more responsibility to the supplier in “vendor managed inventory (VMI)”.
• In VMI, the supplier becomes responsible for maintaining stocks at their customers’
operations, checking the availability, organising deliveries and all other aspects of
inventory control that make sure stocks are available when needed.
Benefits of JIT• lower stocks of raw materials and work in progress• shorter lead times• shorter time needed to make a product• higher productivity• higher equipment capacity and utilisation• simplified planning and scheduling• less paperwork• improved quality of materials and products• less scrap and wastage• better morale and participation of the workforce• better relations with suppliers• emphasis on solving problems in the process. Disadvantages of JIT• high risks of introducing completely new systems and operations• initial investment and cost of implementation• long time needed to get significant improvements• reliance on perfect quality of materials from suppliers• inability of suppliers to adapt to JIT methods• need for stable production when demand is highly variable or seasonal• reduced flexibility to meet specific, or changing, customer demands• difficulty of reducing set-up times and associated costs• lack of commitment within the organisation• lack of co-operation and trust between employees• problems linking JIT to other information systems, such as accounts• need to change layout of facilities• increased stress in workforce• inability of some people to accept devolved responsibilities. Efficient consumer response (ECR)• This extension of JIT along the supply chain is known by a variety of names, including quick response (QR), continuous replenishment planning (CRP) and more commonly efficient consumer response (ECR).• Efficient consumer response (ECR) pulls materials through tiers of organisations in the supply chain.Features of ECR• With JIT this came with kanbans; with ECR it came with Electronic Data Interchange (EDI).• This allows full EDI including purchase orders, invoices, planning information, point-of-sales data, fund transfer, and so on.• Each organisation’s control system sends a message to suppliers and signals the need for more materials using an ‘electronic kanban’. • Some systems go further and hand over more responsibility to the supplier in “vendor managed inventory (VMI)”.• In VMI, the supplier becomes responsible for maintaining stocks at their customers’operations, checking the availability, organising deliveries and all other aspects ofinventory control that make sure stocks are available when needed.
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