Companies are often faced with the choice between two types of waste
Posted: Sun Dec 22, 2024 8:42 am
If production continuity is to be guaranteed, more stock must be kept. Reducing stock, on the other hand, brings tangible savings, but can lead to equally undesirable production interruptions if delivery is delayed. Of course, this problem affects manufacturing companies above all, and it is with them in mind that the following concept has been developed.
Just-in-time method stipulates that a minimum amount of stock is kept and that the materials needed for production arrive at the company when they are needed. But how to achieve code phone number philippines such synchronization with suppliers? Of course, it is not easy and requires very good communication. That is why it is better to work with a small number of suppliers that you can trust. Location will be an important factor: the closer to our plant, the better. The most important thing is to transmit information about demand to suppliers; Toyota used the Kanban method for this, which in itself is so popular and interesting that it deserves a separate section.
Just-in-time works well for companies that are able to standardize their production. In addition, the key to success is often a good contract with the supplier, which transfers much of the responsibility for the entire process and the need to maintain stocks. This is possible when the company has a strong negotiating position vis-à-vis its suppliers and can dictate their terms to a certain extent. On the other hand, a similar effect can be achieved by integrating suppliers into the company, but even then the company's success depends on its ability to meet demanding requirements.
One method that helps implement Just-In-Time is Kanban, a logistics system for maintaining relatively constant stock levels. It consists of automatically placing an order with the supplier when specific stocks fall by a certain amount. Originally, special pieces of paper were used for this purpose, which traveled from the receipt of the delivery to the departure of the finished product, at which point they were returned to the supplier as the order. Today, the system is electronic, which makes it even more useful.
It is important to note that this process does not only apply to suppliers outside the company. If production is divided into stages between departments within the company, one department can be a supplier to another. In this case, production continuity is also important, so the release of the product also generates a signal via the Kanban system to the department upstream in the supply chain, and thus orders can reach the external suppliers.
The entire Just-In-Time system requires a higher than average delivery frequency, which significantly increases costs and may seem uneconomical. However, Toyota's experience shows that the advantages, such as reduced inventories and flexibility, far outweigh the losses and that using this strategy is profitable.
Just-in-time method stipulates that a minimum amount of stock is kept and that the materials needed for production arrive at the company when they are needed. But how to achieve code phone number philippines such synchronization with suppliers? Of course, it is not easy and requires very good communication. That is why it is better to work with a small number of suppliers that you can trust. Location will be an important factor: the closer to our plant, the better. The most important thing is to transmit information about demand to suppliers; Toyota used the Kanban method for this, which in itself is so popular and interesting that it deserves a separate section.
Just-in-time works well for companies that are able to standardize their production. In addition, the key to success is often a good contract with the supplier, which transfers much of the responsibility for the entire process and the need to maintain stocks. This is possible when the company has a strong negotiating position vis-à-vis its suppliers and can dictate their terms to a certain extent. On the other hand, a similar effect can be achieved by integrating suppliers into the company, but even then the company's success depends on its ability to meet demanding requirements.
One method that helps implement Just-In-Time is Kanban, a logistics system for maintaining relatively constant stock levels. It consists of automatically placing an order with the supplier when specific stocks fall by a certain amount. Originally, special pieces of paper were used for this purpose, which traveled from the receipt of the delivery to the departure of the finished product, at which point they were returned to the supplier as the order. Today, the system is electronic, which makes it even more useful.
It is important to note that this process does not only apply to suppliers outside the company. If production is divided into stages between departments within the company, one department can be a supplier to another. In this case, production continuity is also important, so the release of the product also generates a signal via the Kanban system to the department upstream in the supply chain, and thus orders can reach the external suppliers.
The entire Just-In-Time system requires a higher than average delivery frequency, which significantly increases costs and may seem uneconomical. However, Toyota's experience shows that the advantages, such as reduced inventories and flexibility, far outweigh the losses and that using this strategy is profitable.