What thing that doesn’t add value) time,

What isinventoryInventory ismost commonly known as ‘stock’Inventory or ‘stock’ as its more commonlycalled in some countries is defined here as the stored accumulation ofmaterials resources in a transformation system. Sometimes the term ‘inventory’is also used to described any capital management Just in time (JIT) inventoryis a management system in which materials or products are produced or acquiredonly as demand requires.

This approach to managing inventory has becomeincreasingly popular in the early 21st century as suppliers and retailerscollaborate to try to control inventory costs while still meeting customerdemands it-transforming resource, such as rooms in a hotel or cars in avehicle-hire firm, but we will not use that definition here. Usually the termrefers only to transformed resources. So, a manufacturing company will holdstocks for customers. Note that when it is customers who are being processed wenormally refer to the ‘stocks’ of them as ‘queues’.

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This chapter will deal practicallywith inventories of materials.JIT inventoryJust-in-time(JIT) production methods were popularized by the excellent results achieved byJapanese industry. When it became evident during the 1970s that the Japanesewere gaining markets previously dominated by Americans, there was considerableinterest in learning how Japanese industry operates. Then, during the early1980s, Toyota’s highly effective JIT production system had a particular appealto Americans who were trying to understand Japanese production methods.

WhileTaichi Ohno, creator of Toyota’s production system, credits Henry Ford as theoriginator, it is now known that Ernest Kanzler, one of Ford’s subordinates,played a major role in developing JIT production methods. This article reportsFord’s and Kanzler’s contributions and explores the possible influence thatFrederick W. Taylor may have had on the development of this approach at theFord Motor Company.Key components of JIT·        Elimination of waste (Any thing that doesn’t addvalue) time, energy, space and an·        A Broadview of operations (everyone responsible)·        Simplicity (easy to understand and simplesolutions)·        Continous improvement ·        Visiblitly (clean and organsized work areas)·        Flexibility (Being able to accomedate change incustomer in demand·        Respect for people·        Focus on consumer needs·        Partnerships with key suppliersTools of jit·        Pull system ·        Levelling production·        Flexible resources ·        Cell manufacturing ·        Total quality managemet system Benefits of JiT·        Reduction in inventory·        Improved quality ·        Reduced space requirements·        Shorter lead times·        Lower production costs ·        Increased productive ·        Increases machine utilizations·        Greater flexibility  JIT management in fordBalanced scorecard translate fords mission strategy into acomprehensive set of performance measures.Does not focus solely on financial gain-highlights nonfinical objectives that ford must achieve toachieve its long-term finicial objectivesThe balanced scorecard four key perpectivesFinancial (sales,cost ect.)Customer (market share, growth, satisfaction)Internal business processes (innovation impr)Learning and growth (skills, workforce)Using the balnced scorecard attempts to balanceTheir finical and nonfinancial performance measuresShort run and long run performance in a single report, thebalance scorecard allows ford to reduce emphasis on short term financialperformance because; nonfinancial and operational indicators measuresfundamental c hanges Fincial benefits of these changes may be not appear inshort-run earningsNonfincial measures (leading indicators) signal the prospectof creating economic value in the future.Translates the companiesIssuesLack of communication as it follow a top-down management Lack of motivation from employees when implementing thismethod

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