Supply chain management Essay Example | Topics and Well Written Essays - 1750 words

Supply chain management - Essay Example A push system however can meet the requirements of a system which needs large inventory which would be difficult for a pull system to manage. Therefore push systems are good for demand that doesn’t depend on conditions that is, it is ‘independent’ and thus they are dependable sources especially when uncertainty exists in the environment. (Hirano, 2009) Just in time inventory (JIT) is one of the models of inventory and it follows the pull system that can react quickly to demand changes. It is a production strategy which aims to improve business models by increasing their return on investment (ROI) by reducing the time and costs associated with inventory. The process is built around the importance of signals which exist between processes and which will signal the production process when to produce the next part. The signals also called ‘Kanban’ are simply visual and they show shelf space etc. JIT inventory management can lead to improvement in the organ ization of manufacturers and enhances quality, efficiency and investment. The focuses are on the quality, flow of products and the employees. The process is such that depletion in stock will signal personnel to order in new stock and overall inventory reduction is achieved which is the main purpose of this style of management. (Dennis, 2002) This will lead to lower costs of warehousing; however JIT has other elements involved such as the fact that it is not independent of the other proponents of the system. Manufacturers have tried to better this process over the years by forecasting better such as using methods such as trailing. JIT seems to be an appropriate plan for companies...A push system however can meet the requirements of a system which needs large inventory which would be difficult for a pull system to manage. Just in time inventory (JIT) is one of the models of inventory and it follows the pull system that can react quickly to demand changes. Good information system Manufacturing resource planning (MRP) is a push method of inventory management. MRP and JIT compared Since JIT doesn’t allow for pushing of products visibility in JIT is less than in MRP system where forecasting allows for visibility. MRP process also protects each part of the process of operations from being disrupted and therefore it is a more proactive process as compared to JIT approach. The main sacrifice a firm has to make in JIT management system is the inventory and capacity. However in MRP system the stock of extra products allows the system to be continuous and work all the time including when it is not needed. JIT is also a more decentralized approach to operations management which isn’t the case with MRP system or any other system for that matter. A hybrid system Firms were using MRP push model initially and then they started looking towards pull systems like JIT.