Skip to main content

Just-In-Time Delivery

Introduction 
Supply chain management is becoming a major buzzword in the B2B arena. In the quest for better quality outputs, organisations have adopted TQM (Total Quality Management) as a means to gain a strategic advantage. One of the means of improving quality is JIT (Just-in-Time) manufacturing. 

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. Just in Time (JIT) reduces carrying and inventory costs between Business to Business (B2B) entities. A main principle of JIT is to keep inventories low and reduce overheads and carrying costs. However, raw materials must be available on the turn when new stocks are ordered by customers. For example, if VW needs headlights for the Citi Golf range, they would only order lights from the headlight manufacturer when an order for Golfs is placed. The supplier would have to ensure that sufficient headlights are delivered to the Citi Golf plant by the time the cars reach that place on the production line where lights are installed. 

Making JIT work requires an electronic link between customers, the manufacturer and the suppliers of raw materials. This electronic link is called the supply chain. The last two decades have seen the rapid development of software and hardware to facilitate the electronic supply chain. A number of software manufacturers have developed ERP (Enterprise Resource Planning) software to integrate all aspects of the business from administration and procurement to manufacturing and delivery in one package. ERP eliminates wastage and inefficiency, reduces costs, increases quality and ensures timeouts service delivery.

Business customers who run their factories according to the JIT manufacturing principle critically need JIT delivery. In such a case, delivering materials and parts on time is a must. Using electronic commerce, it is highly possible to assure JIT deliveries. Just-in-time delivery can be realized by the coordinated effort of delivery service company and supplier's inventory policy. For example, National Semiconductor was able to deliver to customers JIT by outsourcing the delivery service to FedEx Company.

Previous Next

Labels:

Comments

Post a Comment

Popular Post

Advantages of EDI

1) Shortened Ordering Time : Paper orders have to be printed, enveloped and sent out by the customer's post room, passed through the postal service, received by the supplier's post room and input to the supplier's order pocessing system. To achieve all this, reliably, in under three days would be to do very well. EDI orders are sent straight into the network and the only delay is how often the supplier retrieves messages from the system. Orders can be in the supplier's system within a day, or if there is urgency, the messages can be retrieved more frequently, for example every hour.  2) Cost Cutting : The use of EDI can cut costs. These include the costs of stationery and postage but these will probably be fully matched by the costs of running the EDI service. The principle saving from the use of the EDI is the potential to save staff costs. For example, if the orders are directly input to the system there is no need for an order entry clerk.  3) Elimination of Errors :...
Post a Comment
Read more

Infrastructure for EC

Introduction The e-commerce infrastructure is defined here as the supporting capabilities for online trading between multiple companies which include hardware, software, networks, online payment technologies, security and encryption technologies, online trading business models, legal and regulatory framework, and managerial and organisation capabilities.  Infrastructure is the shared human, informational , and technical resources on which the work system relies in order to operate, even though these resources exist and are managed outside of the work system.  To evaluate the interdisciplinary aspects of construction e-commerce infrastructure, one proposes using a four pillar approach. Figure 5.1 illustrates the skeleton for the proposed integrated construction e-commerce infrastructure. The proposed integrated e-business infrastructure can be broken down into the following four groups of components:  1) Technological Infrastructure : Technology infrastructure is a work...
1 comment
Read more

Business Strategy - E-Commerce Strategy Inputs

E-Commerce Strategy Inputs Traditionally an IT strategy would be subservient to the business strategy. For e- commerce the IT strategy becomes a central component (or the determinant factor) in business strategy.  Inputs to an e-commerce business strategy are: Technology An E-commerce technology includes:  EDI : Streamline supply logistics and facilitate decreases in trade cycle times.  Electronic Markets : Re-define the operation of a market sector.  Internet E-Commerce : Provides new direct sales opportunities and novel business to business and business to consumer applications.  Internet e-commerce can be used to improve, transform and re-define business value:  Organisation  Source of Business value  i) Improve it a) Product promotion b)New direct sales channel c)Direct saving d)Time to market e)Customer service f)Brand image  ii)Transform it a)Technological and organizational learning b)Customer relations  iii)Re-define it a)New pro...
Post a Comment
Read more