A small home appliance manufacturer has recently seen work-in-process inventory piling up at two workstations along the production line. These machines have limited capacity and are bottlenecks. Inventory is backing up all the way back to the stockroom so that they are out of warehouse space and have had a hard time unloading trucks from suppliers. The company is unsure what is causing the issue. Historically and even up to the present time the company has always placed monthly orders to its suppliers and the quantities ordered have always been one twelfth of expected annual requirements as determined when the annual plan/budget was developed. Most of the company’s suppliers have been serving them for many years and the relationships are friendly, maybe to friendly, delivery lead times have always been very inconsistent. Even without placing much emphasis on sales forecasting the company has had significant sales growth in recent years. In the past they have had excess capacity and just made production schedule adjustments as needed to meet unexpected demand from arriving customer orders. To address the current problems, and possibly somewhat due to the fact that the president and founder’s daughter has just returned to the company after completing her MBA at Edgewood College, management is discussing the possibility of implementing just-in-time (JIT) manufacturing.

 Questions

a) Is that the best solution to this issue for this company at this time, why or why not?

b) What are some fundamental requirements for successful implementation of just-in-time?

c) What is the role of suppliers in successful implementation of JIT?

d) How might they provide incentives for suppliers to work with you?