GMS 401 Chapter Notes - Chapter 11: Overproduction, Kanban, Kaizen

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 401
• Professor: Payman Ahi

Document Summary

With jit, materials arrive where they are needed only when they are needed. By driving out waste and delay in this manner, jit reduces costs associated with excess inventory, cuts variability and waste, and improves throughput. Jit is a key ingredient of lean operations and is particularly helpful in supporting strategies of rapid response and low cost. Jit partnership exists when a supplier and a purchaser work together with open communication and a goal of removing waste and driving down costs for mutual benefit. Inventory can also be reduced through a process called consignment: consignment inventory means the supplier maintains the title to the inventory until it is used, concerns of suppliers: Diversification: suppliers may not want to tie themselves to long-term contracts with one customer. The suppliers" perception is that they reduce their risk if they have a variety of customers. Scheduling: many suppliers have little faith in the purchaser"s ability to produce orders to a smooth coordinated schedule.