JIT is Playground for Big Companies

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JIT is Playground for Big Companies
Cengiz Pak, Member
I think that JIT or zero inventory or any system aiming similar targets needs power to execute. There are three cushions against delivery time variability.
1. Stock
2. Extra capacity
3. Unhappy customers
Big companies may push the stock out, but to where!
Most of the time to the poor supplier. Now it is the supplier turn, if he or she can find another poor supplier JIT will follow.

JIT for Third and X-th Supplier?
Eric Schmitz, SIG Leader
Besides the three cushions against delivery time variability (stock, capacity, unhappy customers) you should also mention analysis of customer demand.
A better understanding of the needs of the endcustomer can help you manage capacity, stock and customer satisfaction.
Of course this means that you have to understand the total value stream. Remember: if you do not want to invest in understanding the total value stream (including the different suppliers within this value stream which are not the endcustomer), you have to accept that the next one in the valuestream is your endcustomer.

JIT for the Next One
Cengiz Pak, Member
Yes, it is very important and critical to understand the total value chain and total supply chain expectations. It is very clear that if a company wants to apply JIT principles, the eco-system should be OK. If not, the company needs to be a big customer for the suppliers.

JIT Suitability
Sabari, Member
In the perspective of an OEM, JIT is the most effective operational strategy as it minimizes its investment in inventory, but tier 1 to tier n suppliers will not be liking to supply products in small lots as they think it is not profitable to them as they have to bear the transportation cost. But if we want to establish a lean supply chain, these practices should be followed by suppliers at all levels.

Survival Game
Cengiz Pak, Member
Yes, it seems to be the best strategy. But the savings of the chain are also shared by all members! The name of the game is "survival of the fittest". The companies should work on elimination of waste and keep themselves ready for the next turn.


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