Buy custom Describe The Concept Of Jit And Its Relationship To Logistics. You Must Provide Case Studies
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| Topic: |
Business
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| Number of pages / Number of words: |
4 / 957 |
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(Fillard, Frahm, Mercer & Scott, n.d.) Basically, this means that when an order is placed by a customer, only then will the supply chain starts moving, from the supplier right up to the distributor, ready to be delivered to the customer, in an amazing time of 36 hours!
How did they manage to do it? The following were the steps taken to achieve these results:-
- Supplier companies were reduced from 204 to 47
- Supplier warehouse located just 15 mins from Dell factory
- JIT inventory system was implemented which reduced inventory costs, ie; stocktaking cost, warehousing cost, etc
- Reducing inventory from 30 to 13 days, well ahead of the industry average at that time
- Distributors/shippers were given inventory of monitors, to be delivered concurrently with the computer systems, thus reducing even more inventory costs
With JIT, Dell Computers managed to reduce inventory costs and the savings was passed down to the consumer...
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Also, the computers delivered were customized according to different customer requirements, without compromising on quality. With JIT, production levels can be easily adjusted to meet demand. Integrated supplier and distributor networks were instrumental in the success of Dell Computers. Without these relationships, Dell would not have been able to support a 50+% growth rate for 3 consecutive years that lead to $12 billion in annual sales by 1997...
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