Inventory Management: Just in Time
Inventory Management: Just in Time
Inventory Management: Just in Time
Just In Time
INVENTORY MANAGEMENT
2. Work in progress:
Raw material engaged in various phases of production
schedule.
The degree of completion may be varying for different
units.
The value of work in progress includes raw material cost,
direct wages and expense already incurred ( overheads, if
any)
The work in progress inventory contains partially produced
3. Finished Goods:
Continuous supply
Time period in which inventory completes the cycle of production and sales.
Investment is low in inventory when the turnover rate is high and vice versa
Type of product
Durable products
Under imperfect market condition, the demand is uncertain and stocks must
be held by the firm if the want to take advantage of the profitable
opportunity
Optimum level of sales will depend upon the variability of sales and cost
revenue relationship
Economic production
Maximum level
Minimum level
Reorder level
Danger or safety stock level
Maximum level
This is the maximum quantity above which stock
should never be held at any time. It is fixed after
considering the following factors:
Pull System
System for moving work where a workstation
pulls output from the preceding station as
needed. (e.g. Kanban) .
Push System
System for moving work where output is
pushed to the next station as it is completed.
JIT Through …
Product design.
Process design.
Personnel/organizational elements.
Manufacturing planning and control.
Enabler : Product Design
Standard parts.
Modular design.
Highly capable production systems.
Concurrent engineering.
Use of CAD/CAM.
Use of CFD.
Enabler .. Process Design
Workers as assets.
Cross-trained workers.
Continuous improvement.
Cost accounting.
Leadership/project management.
Enabler .. Planning & Control
Level loading.
Pull systems.
Visual systems (Andon , alarms etc.).
Close vendor relationships.
Reduced transaction processing.
Preventive maintenance.
Kanban as a Control System
Kanban:
Card or other device that communicates
demand for work or materials from the
preceding station.
Kanban is the Japanese word meaning “signal”
or “visible record”.
Paperless production control system.
Authority to pull, or produce comes from a
downstream process.
Kanban..
Fixed quantity bins or containers or pallets
used to signal replenishment needs.