Just-in-Time (JIT) strategies have been widely accepted in literature to minimize the waste and to improve performance measures, such as lead time, inventory levels and unit production cost. This paper analyzes the supply chain of on electronic industry. The relevant data has been collected from the industry records and discussions with the industry people. It has been observed that the industry has presently adopted Economic Order Quantity (EOQ)-based inventory control technique for procurement of raw materials. Efforts have been made to develop a supply model based on JIT philosophy in place of EOQ purchasing. Various JIT practices have been suggested keeping in mind the industrial constraints of the existing industry. Using the developed model, the unit controlling costs of the purchased materials was found to have reduced considerably due to lower level of inventory and space requirement. This paper aims to provide a focused review of literature on JIT practices in supply chain, develop a JIT supply model and make some suggestions to improve the performance of the supply chain of the electronic industry under consideration.
Just-in-Time (JIT) is one of the most contemporary manufacturing techniques and has helped several firms in becoming more productive and competitive. It is defined as, "to produce and deliver finished goods just-in-time to be sold, sub-assemblies just-in-time to be assembled into goods, and purchase materials just-in-time to be transformed into fabricated parts". JIT is planned to get rid of the need to hold items in inventory. A well implemented JIT system will not only save inventory holding costs, but will also result in improved quality, lower manufacturing costs, lower ordering costs, elimination of waste, and streamlining of the production process. The standard JIT practices adopted by various industries and supported by the literature (White and Pearson, 2001; and Kannan and Tan, 2005) are: Kanban, reduced setup time, group technology, total productive maintenance, uniform workload, total quality control, quality circles, multifunction employees, focused factory and JIT purchasing.
The JIT purchasing practice has attracted more attention than any other JIT practices discussed above. Most companies, adopting JIT, view JIT purchasing as a significant component and a major factor in their success. JIT purchasing improves quality, flexibility and level of service from suppliers by developing a buyer-supplier long-term coordination based on mutual trust. A desirable condition in long-term purchase agreements in a JIT environment is the frequent delivery of small quantities of items by suppliers/vendors so as to minimize the inventory holding cost of the buyer. In the JIT environment, the supplier of raw materials is dedicated to the manufacturing firm, and normally is located close by. Ideally, a supplier to the JIT buyer is expected to synchronize his production capacity with the buyer's demand so that the inventory in the pipeline is reduced and eventually eliminated. |
