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JIT: The Concepts of Inventory Management Strategies and Design Presentation

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Updated: Jul 28th, 2022

Introduction

Complexity of manufacturing recommendation requires specific planning such as automation of systems.

Introduction

Examples of Inventory Management systems

  • Material Requirement Planning (MRP);
  • The Just-In-Time Purchasing/Production (JIT);
  • Economic-Order-Quality Decision Model;
  • Back-flush Costing.
Examples of Inventory Management systems

Importance of the management systems

  • Scheduling and recording of orders or raw materials;
  • Managing demands;
  • Maintenance of stock for the dependent demand;
  • Maintaining of an optimal level of inventory;
  • Enhancing purchase of new stock;
  • Accurate delivery of finished inventory;
  • Planning for the daily mechanizing processes;
  • Reduces the cost of caring inventory;
  • Reduces costs associated with long-term purchasing agreements;
  • Limits extended purchase periods;
  • Determining output requirements at each stage of production.
Importance of the management systems

Entities of inventory management

  • Planning procedures;
  • Coordinating activities;
  • Controlling activities.
Entities of inventory management

Costs associated with control of inventory

  • Purchasing costs;
  • Ordering costs;
  • Stock caring and quality costs.
Costs associated with control of inventory

Best inventory control and material planning requirement for Going’s Planes

  • Quality management strategy;
  • Biannual annual or multiple inventory analysis programs;
  • Vender-owned management system.
Best inventory control and material planning requirement for Going’s Planes

Solving the problems of inadequate supply for demand

  • JIT production avails finished products of forecasted demands;
  • Final production depends on the demand indicated on the components by bill of material;
  • JIT focuses on subcomponents and materials requirements for the final production;
  • MRP of the JIT inventory depends on the quantities, raw material;
  • Inventories determines the output requirements at each stage of production;
  • Timely meets customer’s demands within the highest quality production and lowest possible net costs;
  • JIT improves business financial performance such as inventory or turnover;
  • Supports non-financial performance aspects such as time, quality and quantity of the required inventory;
  • Decreases the lead time for production;
  • Decreases time limit for handling the inventory;
  • Decreases rate of machine maintenance;
  • Decreases machine’s setup time;
  • Increases the rate of production.
Solving the problems of inadequate supply for demand Solving the problems of inadequate supply for demand

Advantages of an Inventory Management system

  • Provides details of manufacturing stages;
  • Helps to determine requirements;
  • It is a plan indicating the aspects of the manufacturing process;
  • Keeps track of the inventory and material requirements;
  • Maintains a level of stock to cater for emergency cases;
  • Ability to plan for future deals or requirements such as raw materials.
Advantages of an Inventory Management system

Challenges of an Inventory Management system

  • Need for accuracy to avoid poor planning or overstocking;
  • Need for accurate master schedule;
  • High implementation costs;
  • Time consuming;
  • Expensive to put into practice;
  • Discipline or inaccurate record keeping procedures;
  • Involves lack of standardized measures;
  • Venerability to risks.
Challenges of an Inventory Management system

Recommended solution

  • Proper calculation of the Return on Investments (ROI) for the inventory system to implement;
  • True cost of a solution must be lower than the risk exposure.
Recommended solution

References

Albrecht K. (2008). Eight “super-trends” you must master to succeed in business. Web.

Griffin, R.W. (2007). Fundamentals of management. Cengage Learning Publishers.

Khosrow-Pour, M. (2004). A Case Study on a Security Maturity Assessment of a Business-to-Business Electronic Commerce Organization. Journal of Electronic Commerce in Organization. Vol 2 (No 4), Idea Group Inc.

McNamarra C. Web.

Sonnenreich, Wes & Albanese, Jason. (n.d.) Return On Security Investment (ROSI): A Practical Quantitative Model. New York, NY, SageSecue, LLC publishers.

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IvyPanda. "JIT: The Concepts of Inventory Management Strategies and Design." July 28, 2022. https://ivypanda.com/essays/jit-the-concepts-of-inventory-management-strategies-and-design/.

References

IvyPanda. 2022. "JIT: The Concepts of Inventory Management Strategies and Design." July 28, 2022. https://ivypanda.com/essays/jit-the-concepts-of-inventory-management-strategies-and-design/.

References

IvyPanda. (2022) 'JIT: The Concepts of Inventory Management Strategies and Design'. 28 July.

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