Running Head: JIT AFTER CATASTROPHE
Case Studies 4 – JIT after Catastrophe
Chelynmae Fuller
OMGT 410 – Operations Management II
December 2, 2012
Instructor – Bruce Stephens
Southwestern College Professional Studies
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JIT AFTER CATASTROPHE
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THE SITUATION
When a catastrophe occurs, businesses need to have a redundancy plan to handle such
catastrophes’. This is where JIT (Just-In-Time) becomes useful. Companies like Toyota have had
its world-renowned JIT system tested by fire. Chrysler and many others had their JIT systems
tested on September 1, 2011, when the terrorist’s attacks shut down their state –of-the-art air
delivery systems.
THE PROBLEMS
An earthquake destroyed Toyota’s transmission supplier, Riken, shutting down production in a
dozen factories. During a second shift at Caterpillar’s high-pressure couplings plant in Oxford,
MS, a tornado destroyed the whole facility. These are perfect example that huge problems do
arise and when they do, companies need to have a plan on how to fix them. In the Caterpillar
case, a plan on how to quickly get back into production and build a new facility.
THE CRITICAL FACTOR(S) BEARING ON THE PROBLEM(S)
No one knows how hard a or how huge will the affected area be when a catastrophe strikes.
There are scientists and forecasters whose jobs are to attempt and give us all a probability of
where for example, will a tornado hit, but earthquake for example even if they can measure the
intensity there’s no sure forecast until after it hits. An earthquake hit Japan first and then a
Tsunami, the nuclear plants engineer would have probably predicted the strength of the buildings
and durability in the initial construction process but I have a feeling that the plants overlook a
possibility of a Tsunami hitting that area.
JIT AFTER CATASTROPHE
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THE DISCUSSION OF POSSIBLE SOLUTIONS
These firms are very consistent with JIT practice of knowing the components and having a
redundancy plan. These companies are aware that without critical components, production comes
to a rapid halt. In caterpillar’s case for example, the oxford plant is the only plant in the world
that makes this unique coupling.
THE RECOMMENDED SOLUTION
Recommended solution to keep with JIT practices is to have a low holding inventory to keep
firms lean and the cost low. By implementing JIT companies has the ability to cuts costs by
consolidating production and reducing inventory.
THE REASON(S) FOR THE RECOMMENDED SOLUTION
The reasons for recommended solution are to cut cost while maintaining low inventory. This will
prevent a major loss of inventory when a catastrophe strikes. JIT inventory in production and
distribution systems exist “just in case” something goes wrong. JIT is a minimum inventory
necessary to keep a perfect system running. With JIT the exact amount goods arrives at the
moment it is needed, not a minute before or a minute after.
THE ACTION(S) REQUIRED
Actions required are to know a product’s component and its reliability. There is no way to
prevent catastrophes from occurring but there is a way to minimize the damage done by
preparing for it. JIT is forced problem solving via a focus on rapid throughout and reduced
inventory. JIT provides a powerful strategy for improving operations.
References:
Heizer, J. H., & Render, B. (2010). Operations management. (10e ed.). Prentice Hall.