Just in Time Inventory Management Essay

bonny In sentence pedigree ManagementDefinitionJust-in-Time (JIT) list management is the process of ordering and receiving document for end product and customer sales only as it is needed and not before. This essence that the companionship does not hold safety stock and operates with low documenting levels. This strategy helps companies lower their blood carrying cost.Just-in-time blood line management is a cost-cutting stemma management strategy though it can lead to stock-outs. The cultivation of JIT is to improve return on investment by reducing non-essential costs.http//bizfinance. intimately.com/od/glossaryj/g/Just-In-Time-Jit- blood-Management.htmhttp//small fear.chron.com/advantages-disadvantages-justintime- descent-21407.htmlAdvantages & Disadvantages of Just-in-Time lineby Neil Kokemuller, Demand MediaCompanies turnover significant farm animal control to suppliers with just-in-time inventory. Related Articles* The Advantages of Just-in-Time scrutinise Syst ems * Advantages & Disadvantages of Excess Inventory * Examples of Just-in-Time Inventory* Just in Time Inventory Definition* Advantages & Disadvantages of Matrix Organizational Structures in Business Organizations * The Disadvantages of Buy-Hold-Sell InventoryJust-in-time (JIT) inventory refers to an inventory management constitution with objectives of having inventory readily available to meet demand, but not to a presage of nimiety where you essential stockpile extra products. Maintaininginventory takes time and has costs, which is what motivates companies to see JIT programs. Ads by GoogleProduction managementComprehensive SCM, SRM & WMS Suite from Epicor. Learn More.Epicor.com / scattering Customer NeedsBalancing the goals of avoiding stock outs while minimizing inventory costs is at the heart of just-in-time inventory. One of the main benefits of automated and in effect(p) inventory replenishment dusts is that you can quickly respond to reduced inventory levels. Compa nies are now equipped to pull back on stock in a given product category and ramp up inventory in an separate as customer needs and interests change. Inventory beMinimization of inventory management costs is a primary driver and benefit of just-in-time practices. Inventory management has costs, and when you reduce the amount of property quadruplet and staff required with JIT, the company can invest the savings in origin growth and other opportunities, points out the Accounting for Management website. You similarly gift less likelihood of throwing out product that gets old or expires, meaning reduced waste. CoordinationA disadvantage of managing a just-in-time inventory system is that it requires significant coordination between retailers and suppliers in the distribution channel. Retailers often put major trust in suppliers by syncing their computer systems with suppliers so they can much directly monitor inventory levels at stores or in distribution centers to initiate rapi d response to low stock levels. This usually means build up of technology infrastructure, which is costly. This coordinated effort is more involving on the whole than less time intensive inventory management systems. RisksJust-in-time inventory is not without risks. By nature of what it is, companies using JIT intend to walk a fine line between having too much and too junior-grade inventory. If company buyers fail to adjust quickly to increased demand or if suppliers have distribution problems, the business risksupsetting customers with stock outs. If buyers over cover and buy extra inventory to avoid stock outs, the company could catch higher inventory costs and the potential for waste. Sponsored LinksMYOB Accounting software productSimple, Reliable & Secure Solutions Call without delay for a Free conclusion www.globalbiz.com.sgWeb Database App software productDeploy data-driven web applications straight from your database Try it www.ironspeed.comPrimavera P6 PPM SoftwareSoftw are Consultation Implementation Support www.crownsys.com.sg / PrimaveraIT encourage Desk SoftwareWeb-based IT Help Desk with Asset Mgmt. Free version too. Try Now www.ManageEngine.com / Help_DeskReferences (2)About the penNeil Kokemuller has been an active writer and content media website developer since 2007. He wrote regular feature articles for LiveCharts for collar years and has been a college marketing professor since 2004. He has four years of additional professional experience in marketing, retail and small business, and he holds a Master of Business Administration from Iowa State University.http//smallbusiness.chron.com/disadvantages-inflating-inventory-38062.htmlThe Disadvantages of Inflating Inventoryby Cynthia Myers, Demand MediaCarrying a large inventory incurs certain costs.Related Articles* Disadvantages of buying Inventory in December* Advantages & Disadvantages to a Manual Inventory mastery System * The Disadvantages of Buy-Hold-Sell Inventory* Disadvantages of superior Inventory Levels* Advantages & Disadvantages of Excess Inventory * The Disadvantages of the free burning Inventory SystemIncreasing inventory in times of travel costs allows you to take advantage of lower prices now, which can result in increased profits as you sell clear up the inventory. But inflating inventory also carries significant disadvantages. The right inventory strategy for you depends on the business youre in, your profits and losses and your ability to comfortably carry an increase inventory. Analyzing your individual situation will tell you if the disadvantages of magnifyd inventory maintain to you. Ads by GoogleExcel Spreadsheet TemplatesFill-in the blanks & easily create any business document Download NowBiztree.com Increased CostsThe costs of inventory go beyond the purchase price of the goods or materials in your inventory. You must represent for space in which to store your inventory. If the inventory is perishable, youll rack up profit bills to heat and cool the space. You may need additional personnel to incubate the inventory. If you buy materials or goods at a steep enough discount, your savings may be enough to offset these additional costs, but in many cases the cost of adding to your inventory cancel out your savings. Increased TaxesThe informal Revenue Service considers your inventory to be an asset, and youre required to put up taxationes on the inventory in stock at the end of the year. This is the campaign you see many businesses hold Inventory Reduction Sales at years end. These businesses are looking to reduce their tax core group by selling off excess inventory. If, instead of selling off inventory, youre foc expenditured on accumulating it, you could find yourself with a bigger tax bill. Before you build up your inventory, you should consider the possible tax implications of doing so. despoilment LossesMost goods have a shelf life a period after which they begin to deteriorate and spoil. For perish ables such as aliment this can be a relatively short period. Durable goods have a longer shelf life, but even these can fall back value over time. Fashions or household goods go out of style, fabrics breatheor are susceptible to damage from dust, insects or fire. If you build up too much inventory, you could be left with a quantity of deceitful goods on hand, resulting in a loss. Other ConsiderationsWhen you increase your inventory because you sleep with across a good deal on goods or materials, or because you think the prices will increase in the future, youre gambling that your predictions about the future will come true. If, for example, the price of the goods and materials falls, youre left holding an inventory of items for which you paid more than the current market rate. If you decide to inflate your inventory, double and triple check the information that led you to believe doing so was a good idea, and consider all the implications to your bottom line. What Is the Purpose of Just-in-Time Inventory Systems?by Luanne Kelchner, Demand MediaJust in Time reduces stored inventory.Related Articles* Inventory & Work Order Systems* An Introduction to Inventory Management Systems* The Advantages of Just-in-Time Inventory Systems * Examples of Just-in-Time Inventory* Just in Time Inventory Definition* Advantages & Disadvantages of Just-in-Time InventoryCompanies use a Just-in-Time manufacturing and inventory management system to improve the efficiency of the company and reduce costs. The system requires manufacturers to purchase only when customer orders create a demand. Companies must develop a relationship with vendors to ensure parts fall out the facility in time to manufacture products for the customer request. Businesses only bewilder inventory when there is a customer order in place. The system does not allow the business to produce or store excess inventory. Just-in-Time systems work in large and small organizations and those that produce products or services. With adjustments, the principles of Just-in-Time inventory management and manufacturing can work in anybusiness. Ads by GoogleSystems designProduction & Process Manager Jobs Submit Resume to Apply NowMonster.com.sg / Systems+engineering Reduce Inventory CostsUsing a Just-in-Time inventory system reduces the amount of material on hand in the payoff facility. Companies can reduce the cost to store and maintain excess inventory and eliminate the risk of materials becoming obsolete while in storage. High inventory quantities tie up company funds, which could otherwise benefit other areas of the business such as the research and development of new products. With the decrease in inventory costs, companies can expand and grow their businesses. Lead Time ReductionJust-in-Time manufacturing also uses a pull system to send away materials through and through the production cycle. For example, in a manufacturing business, materials do not move to the close step on an assembly lin e until that step or range is ready. This reduces the stockpiling of unfinished product at any stage in the production process. When the company eliminates bottlenecks, production speed or lead-time is faster. Process engineers must determine the maximum quantity any station in the production process can have waiting. While workers may sit barbarian waiting to move production to the next step, the process is more efficient. high-octane Manufacturing LayoutCompanies must create a layout on the production floor to move materials through the process efficiently. Some companies must move workstations closer unitedly to eliminate steps in the work process. This leads to a more efficient manufacturing layout that can significantly reduce lead tIme. Building products efficiently is a primary focus for a company implementing a wobble manufacturing system. meliorate Customer SatisfactionCompanies implement a Just-in-Time system or lean manufacturing to satisfy the demands of customers. The voice of the customer is always present in a Just-in-Time manufacturing environment. Reductions in lead time and costs can help a company deliver a product to the customer faster and for a lower price.