Just in Time Ordering
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1. Some companies contend that they can never adopt JIT because their suppliers are located all over the country and the distances are too great. What might you suggest to these firms?
2. How do you go about creating the organizational climate for a successful JIT implementation? Where do you start?
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Solution Summary
This detailed solution outlines the challenges in adopting just in time ordering (JIT) due to locations of suppliers and distances of product. It also outlines how to create an organizational climate for successful Just in Time implementation. It includes links and examples.
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1. Some companies contend that they can never adopt JIT because their suppliers are located all over the country and the distances are too great. What might you suggest to these firms?
JIT works regardless if the supplier is across the street or across the country. There are two different ways to approach this: major corporations utilize software systems to predict sales, factor in lead times, and safety stock to have product arrive "just in time". Smaller companies can place purchase orders with longer lead-time, and should include a "Call prior to shipping" tag on purchase orders. Shipping times are predictable across the country. At the point the supplier calls you then you decide at that time exactly when the product is needed. Another option is to place a large order, and have the supplier break it up as the company's needs arise. Regular orders would be scheduled, with the option to skip or double up as need arises.
Wal-Mart, Home Depot and other large retailers have been particularly successful with JIT ordering by developing strong relationships with their suppliers. Communication is key with ...
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