What production methods. This article reports Ford’s and

What is
inventory

Inventory is
most commonly known as ‘stock’

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Inventory or ‘stock’ as its more commonly
called in some countries is defined here as the stored accumulation of
materials resources in a transformation system. Sometimes the term ‘inventory’
is also used to described any capital management Just in time (JIT) inventory
is a management system in which materials or products are produced or acquired
only as demand requires. This approach to managing inventory has become
increasingly popular in the early 21st century as suppliers and retailers
collaborate to try to control inventory costs while still meeting customer
demands it-transforming resource, such as rooms in a hotel or cars in a
vehicle-hire firm, but we will not use that definition here. Usually the term
refers only to transformed resources. So, a manufacturing company will hold
stocks for customers. Note that when it is customers who are being processed we
normally refer to the ‘stocks’ of them as ‘queues’. This chapter will deal practically
with inventories of materials.

JIT inventory

Just-in-time
(JIT) production methods were popularized by the excellent results achieved by
Japanese industry. When it became evident during the 1970s that the Japanese
were gaining markets previously dominated by Americans, there was considerable
interest in learning how Japanese industry operates. Then, during the early
1980s, Toyota’s highly effective JIT production system had a particular appeal
to Americans who were trying to understand Japanese production methods. While
Taichi Ohno, creator of Toyota’s production system, credits Henry Ford as the
originator, it is now known that Ernest Kanzler, one of Ford’s subordinates,
played a major role in developing JIT production methods. This article reports
Ford’s and Kanzler’s contributions and explores the possible influence that
Frederick W. Taylor may have had on the development of this approach at the
Ford Motor Company.

Key components of JIT

·        
Elimination of waste (Any thing that doesn’t add
value) time, energy, space and an

·        
A Broadview of operations (everyone responsible)

·        
Simplicity (easy to understand and simple
solutions)

·        
Continous improvement

·        
Visiblitly (clean and organsized work areas)

·        
Flexibility (Being able to accomedate change in
customer in demand

·        
Respect for people

·        
Focus on consumer needs

·        
Partnerships with key suppliers

Tools 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 ford

Balanced scorecard translate fords mission strategy into a
comprehensive set of performance measures.

Does not focus solely on financial gain

-highlights nonfinical objectives that ford must achieve to
achieve its long-term finicial objectives

The balanced scorecard four key perpectives

Financial (sales,cost ect.)

Customer (market share, growth, satisfaction)

Internal business processes (innovation impr)

Learning and growth (skills, workforce)

Using the balnced scorecard attempts to balance

Their finical and nonfinancial performance measures

Short run and long run performance in a single report, the
balance scorecard allows ford to reduce emphasis on short term financial
performance because; nonfinancial and operational indicators measures
fundamental c hanges

Fincial benefits of these changes may be not appear in
short-run earnings

Nonfincial measures (leading indicators) signal the prospect
of creating economic value in the future.

Translates the companies

Issues

Lack of communication as it follow a top-down management

Lack of motivation from employees when implementing this
method

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