JIT in Variable Marketplaces

JIT in Variable Markets
Charles Shillingburg, Director, United States
I would need to have more information about what the process(es) is/are to solve this. Can line balancing be employed? Can you set up a supermarket?

JIT in Variable Markets
Beddoe, Manager, United Kingdom
We essentially are merchants of stock glass, essentially a "supermarket" for our customers. There is little manufacturing at our site that impacts on the stock control.
I'm looking at patterns within the ordering of our customers and I'm finding little to work with however stock levels being maintained are way too high at present.
Lead times are one/two days from order to delivery which makes this problem even worse as we are limited on where we can source the product. What we have is essentially a pull from the customer with random products and quantities. We are now limited on space and need to generate space for an essential change to our business.
Since the last post I've been looking at demand smoothing and setting up a network between the two other sites within our region to act as satellite sites for slower moving items. I've also looked at creating a more formal "pull system" for the stock control with a kanban for each product. Thanks for your reply.

JIT in Variable Marketplaces
Atulan Lahiri, India
Obviously if 2 days of order fulfilment lead time is industry norm, you have little time to react. Your cash position is tight. Why not try something like Dell? Increase your reaction time say by 5 days to up to a week and offer better prices that will be funded by your reduced inventory costs and interest burden?
I am not realy to believe customer is so crazy about the order that he cannon wait for 5 more days for a better price, if he really cannot, it means his own business is in mess, he has practically no control over his business.
In that case, you will have to understand the reasons behind such rigid behaviour from his end, what is his planning visibility, so on.
Whatever be the case, I strongly believe you can add value to your customer and it's not a bad idea to steal concepts from Dell (reduced variability and price against longer lead times), P&G (CPFR, know your partners' pains), Saint Gobain (renegotiate payment terms).

JIT in Variable Markets
Beddoe, Manager, United Kingdom
Thanks - the methods I was looking at for demand smoothing are similar in that I was looking at offering discounts for customers to place orders in advance (i.e. for all their weekly/monthly requirements).

JIT in Variable Markets
Atulan Lahiri, India
I don't want to sound cliched, the point is JIT and other lean principles are typically efficiency enhancement tools. But, they are of limited relevance if basically things are not in place - in other words the effectiveness paradigm. If you continue to be constrained by market determining forces (price, supply lead times, package offerings, etc), there is no point in silently witnessing the daily strains in your internal business processes. Money is the most critical "commit" decision. If that is being lost in the process, not much else if of help here. I guess you can make operational improvements only to the extent you are not funding your customer's business (like the goof ups in stocking inventories, releasing your pos on vendors early on, the mismatch of credit terms between vendors and customers, so on). My work is more about implemeting things at the ground level than merely ideating and creating scenarios.