SUNERZHA
Volkova Nataliia
Kostoev Akhmed
Pugoev Ruslan
Palchaev Magomed
CURRENT WORKPLACES ORGANIZATION
Product layout
Parallel flows of production
Product principles
Developing production
Maximizing problem
points:
0
1
5
If needed:
1) Analyse popular sizes and
prepare elements
2) Test quick order processing
0
"Weak" points:
1) Production starts only after
order
2) The gap between order and
processing
3) Other problems that can be
discovered further
3
5
1) Check what problems appear;
return back to previous system
2) Hire more managers, use CRM
system
Check new production flow
0
2
5
0
4
5
JIT production
The just-in-time (JIT) inventory system is a
management strategy that aligns raw-material orders
from suppliers directly with production schedules.
Companies employ this inventory strategy to increase
efficiency and decrease waste by receiving goods only
as they need them for the production process, which
reduces inventory costs. This method requires
producers to forecast demand accurately.
This system minimizes inventory and increases
efficiency. JIT production systems cut inventory costs
because manufacturers receive materials and parts as
needed for production and do not have to pay storage
costs. Manufacturers are also not left with unwanted
inventory if an order is canceled or not fulfilled.
Pros and cons of JIT production
Advantages
Disadvantages
Reduced Space Needed - With JIT you have a faster turnaround
of stock, which means that you do not need a lot of warehouse or
storage space to store goods or materials.
Risk of Running Out of Stock - With JIT manufacturing, you do not
carry as much stock. This is because you base your stock off of
demand forecasts, and if those are incorrect, then you will not
have the correct amount of stock readily available for your
consumers.
Smaller Investments - JIT inventory management is an ideal
methodology for small production facilities that do not have the
funds needed in order to purchase huge amounts of stock at
once.
Dependency on Suppliers - Having to rely on the timelessness of
suppliers for each order puts you at risk of delaying your
customers’ receipt of goods.
Waste Elimination/Reduction - A quicker turnaround of stock
prevents goods that have become damaged or obsolete while
sitting in storage, reducing waste.
More Planning Required - JIT inventory management requires
companies to understand sales trends and variances in close
detail.
Analysis of the graph
Costs
●
Initial Setup Costs
●
Labor Costs
●
Raw Materials and Inventory Costs
●
Quality Control
●
Maintenance and Equipment Upkeep
●
Utilities and Overheads
●
Transportation and Logistics
●
Economies of Scale
●
Risk and Flexibility
●
Opportunity Costs
Calculations of costs
Total Annual Cost for In-House Production
(72,000 units)= Total production cost per unit
* Annual production volume= 192 * 72,000
units= 13,824,000
Total Annual Cost from External Suppliers (at the lowest
price and next price):
●
Lowest price
Total annual cost at lowest price = Lowest price per unit *
Annual production volume = 164 * 72,000 units= 11,808,000
●
Next price
Total annual cost at next price = Next price per unit * Annual
production volume = 176 * 72,000 units= 12,672,000