SUPPLY CHAIN MANAGEMENT

UNIT II Part 3.4

By, P. srinu 24

JIT(just in time)

Definition:Just in time (JIT) is a production strategy that strives to improve a business' return on investment by reducing in-process inventory and associated carrying costs.

It makes use of kanban cards Kanban are usually 'tickets‘ and can be

simple visual signals, such as the presence or absence of a part on a shelf. Could be flow, employee involvement and quality.

Kanban cards :-these are a key component of kanban and signal the need to move materials within a manufacturing or production facility or move materials from an outside supplier in to the production facility

Three-bin system

ADVANTAGES

• Reduced setup time.• employee efficiency• saves time and cost• minimize storage

DISADVANTAGES

• Supply or demand shock

VMI

• Vendor-managed inventory (VMI) is a family of business

models in which the buyer of a product (business) provides

certain information to a vendor (supply chain) supplier of

that product and the supplier takes full responsibility for

maintaining an agreed inventory of the material, usually at

the buyer's consumption location (usually a store).

• A third-party logistics provider can also be

involved to make sure that the buyer has the

required level of inventory by adjusting the

demand and supply gaps.

• SHARED RISK

• Better flow of knowledge

OUTSOURCING

• outsourcing is the contracting out of a business process to a third-party.

• Types:-Domestic,international,offshore REASONS• Cost• time• Saves manpower• Increases Effective concentration

examples

• security, • customer support,• advertising

Factors influencing the decision making of the outsourcer

• focus resources on core activities• financial • benefit from supplier’s investment • innovation and improve time to

market.• Flexibility• business, • technical and political

• Dhanyavad