There is always going to be forecasting error since it is not a exact science and if we do the things in a traditional way there is always going to be dilema in deciding about the following:
Purchasing:What should we buy and how much and when?
Production:What should we really build and when?
Inventory Management: What should we hold and duration of the same?
So,the solution lies in Just-in-time(JIT) which is an integrated set of activities designed to achieve high volume production using minimal inventories of raw materials,work in progress,and finished goods.Parts arrive at a workstation just when they are required and move through the operation quickly.It is based on the logic that nothing will be produced until it is needed.JIT works on a pull system.When an item is sold,the market pulls a replacement from the last workstation,that is,finished goods.
The last workstation in turn pulls parts or subassemblies from the station upstream of it and assembles another unit.The upstream station in turn pulls from the station immediately upstream of it and so on back to the release of raw materials.
For the pull system to work smoothly,high quality, strong vendor relationship, and a fairly steady demand is required.
The customer requires the product to arrive at his location on 03/31/2011.
Considering the company developed the culture of JIT and streamlined the processes in such a way that whatever be the fluctuation in demand it is thoroughly prepared for the same.
So,the timeline is as follows:
Name of process/Activity Date & Day Remark
Arrival at the customer location 03/31/2011 & Thrusday Arrival date as per purchase order.
Dispatch from the manufacturer(Finished Product) 03/10/2011 & Thrusday Shipping/Logistics time is 3 weeks.
Assembling of components widget,plastic cover wrapping and putting it into cardboard(Manufacture) 03/09/2011 & Wednesday Assembling time is 1 day.
Widget manufacturing from steel 03/02/2011 & Wednesday Manufacturing time is 1 week.
Ordering of steel from vendor C 02/04/2011 & Friday Delivery time is 4 weeks.
Ordering of cardboard from vendor B 02/11/2011 & Friday Delivery time is 4 weeks.
Ordering of plastic cover from vendor A 02/18/2011 & Friday Delivery time is 3 weeks.
Purchase order date 01/01/2011 & Saturday
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