The paper 'The Concept of Operations Management' is a perfect example of a management term paper. We will attempt to show how operations management and its components are vital to any company. Answering questions pertaining to the concept of operations management we will examine the issues arising out of these questions. Looking at the definition of Just-in-Time; we will argue if this definition fully describes the system and if this definition can be improved. How a product is designed and whether simultaneous development or in other words concurrent engineering lends to a successful design.
We will also consider the argument that higher quality comes at a higher cost. We will explain and establish personal views on these questions and attempt to show how these are relevant in a modern context. Explaining how manufacturing has benefited from the innovative application of such principles. Optimally managing a set of processes in an organization, to create a product or deliver a service constitutes operations management. It covers almost all activities in a company including inventory and logistics and ensures that processes are efficient and effective. The definition “ Just-in-Time (JIT) is a system for controlling stocks” is only one among several used to define this system.
Whether or not this definition manages to cover the varied scope and objectives of JIT is what we will attempt to answer. Created by Taiichi Ohno of Toyota Motor Corporation of Japan, the Just-in-Time inventory system is partially based on the ideas of Henry Ford. “ Our finished inventory is all in transit. So is most of our raw material inventory. When production stands at 8,000 a day, this means that our various factories manufacture and ship enough to make 8,000 complete cars.
We know just how many machines and employees it will take to reach a given figure at a given time, and how to take care of seasonal demands without the danger of becoming overstocked. A thirty-day supply of any one material is the maximum carried by a department. . . The average department inventory is less than ten days’ supply” (Henry Ford). Inventory for a manufacturer usually consists of raw materials, work in progress components, and finished goods.
As a system, Just-in-Time (JIT) governs how and when raw materials and components are procured from a vendor or supplier. Raw materials are procured when re-order levels are reached, limiting capital expenditure and the amount of warehouse space used. Ultimately, this results in finished goods reaching wholesalers and retailers in time eliminating the need for warehouses. The core strategy of JIT is the optimum utilization of inventory and the elimination of waste in order to increase the return on investment. Excessive inventory is seen as an effect of bad management practices.
JIT has graduated over the years into a whole philosophy, to be adopted and followed by an entire company. Ideas contributing to this philosophy come from various fields including behavioral science, industrial engineering, statistics, and production management. The Just-in-Time system can be applied to a number of work processes, ranging from manufacturing to non-manufacturing and people. Effective scheduling of work hours and training employees in multiple skills is how people are optimally used by the JIT system. Under this system, employees with multiple skills can be shifted to different jobs during periods of peak demand.
Ford, Henry - Today and Tomorrow:
Drucker, Peter F. - http://thinkexist.com/quotations/quality/