Reasons for the success of Dell with JIT: • Dependence on suppliers although mee

Question

Reasons for the success of Dell with JIT: • Dependence on suppliers although meeting the lead time requirements consistently • Seamless system that allows Dell to transmit its component requirements so that all needs are full filled on time • Suppliers willing to keep inventory in hand and hence Dell is comparatively free of responsibility • Dell Having warehouse space at their manufacturing facilities, where suppliers keep parts directly In general, it can be simply understood by Dell's working traditional working mode i.e.; after Dell has received a customer order, they then begin production of the product that the customer desires.

What are the advantages of using JIT/Lean Technology in the industry for the industry above?

Explanation / Answer

First ket us undesratnd what is JIT

Just in time (JIT) is an inventory management system, used to manage the stock that is kept in storage. It involves receiving goods from suppliers as and when they are required, rather than carrying a large inventory at once.

Less space needed: With a faster turnaround of stock, you don’t need as much warehouse or storage space to store goods. This reduces the amount of storage an organization needs to rent or buy, freeing up funds for other parts of the business.

Waste reduction: A faster turnaround of stock prevents goods becoming damaged or obsolete while sitting in storage, reducing waste. This again saves money by preventing investment in unnecessary stock, and reducing the need to replace old stock.

Smaller investments: JIT inventory management is ideal for smaller companies that don’t have the funds available to purchase huge amounts of stock at once. Ordering stock as and when it’s needed helps to maintain a healthy cash flow.

Minimizing Production Mistakes- Production mistakes can be spotted more quickly and corrected, which results in fewer products being produced that contain defects.

Low Inventory- The very low inventory levels mean that inventory holding costs (such as warehouse space) are minimized.

Better Supply Chain Management- The just-in-time inventory model can also help companies be more efficient and competitive in the way they handle their supply chains and use their parts to assemble products for their customers. A more efficient supply chain can provide lower costs throughout the manufacturing process, and those lower costs can then be passed on to the customer. Those lower costs can make the company's products more affordable, and help the company gain a larger market share and stay ahead of its competitors.

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