Questions for Evaluation

Operations Management

Group 5: JUST IN TIME AND LEAN OPERATIONS AT DELL

Q.1 Compare another electronic manufacturing/assembling firm with the model used by
DELL. Why are they not switching to JIT what are the constraints?

There are very few electronic manufacturing firms that implement lean operations in its
true sense. When we talk about the largest technology firm, Apple Inc is one firm that
makes effort into continuous improvement and innovation for its product categories. So the
question arises if Apple is actually Lean? While Apple doesn’t claim to be a Lean
organization we can certainly see some characteristics of a Lean culture in their thinking.
Since the release of the very first iPod, their attention to detail and emphasis on eliminating
waste from the customer experience has been given ample attention.

1. Packaging: The packaging of apple products comes in a small yet elegant package.
For Apple the packaging is just as important as the package. In fact, Apple has
numerous patents just for their packaging. There is no clutter, no unused space and
its attractive to look at.
2. The Apple Store: The Apple store has done much more than be a source of revenue
for the brand. One visit to the clean, clutter free, hands-on store experience and you
understand the store is about promoting an image and reinforcing the culture that
Apple has built. Even organizations that have practiced Lean for years still struggle
with this aspect. Creating value for your customer takes creativity and dedication.
The Apple store not only adds value to their customers experience, but does so in a
manner that is Lean in nature — even if they don’t claim so.
3. Cost Vs. Value: The way lean is implemented these days is to essentially cut down on
costs. Eliminating work-in-process, reducing the need for space, and increasing
output per employee are all the natural results of lean and all result in positive
impact to the bottom line. Rarely was reducing costs the primary motivation behind
Steve Jobs’ decisions. The decision to open retail stores provides a telling example.
Steve Jobs obsessively wanted to control the entire flow of work in the design team.
He and his team would obsess on every minutest detail of every product. They would
streamline the whole process and find ways to eliminate unnecessary steps. Even in
the retail store design, Steve Jobs would figure out ways to streamline the process by
eliminating some unnecessary step, such as handing over the credit card or printing
a receipt.
Q.2 Discuss disadvantages of JIT and possible solutions to overcome them.

DISADVANTAGES OF JUST-IN-TIME INVENTORY MANAGEMENT

Risk of Running out of stock:

By not carrying much stock, it is necessary for you to have the correct procedures in place to
ensure stock can become readily & quickly available. To do this, you need to have a good
relationship with your supplier.
SOLUTON: We may need to form an exclusive agreement with suppliers that specifies
supplying goods within a certain time frame, prioritising our company.

Lack of Control over Time Frame:

Having to rely on the timeliness of suppliers for each order puts you at risk of delaying your
customers’ receipt of goods. If you don’t meet your customers’ expectations, they could
take their business elsewhere, which would have a huge impact on the business if this
occurs often.

More planning required:

With JIT inventory management, it’s necessary for companies to understand that
companies understand their sales trends and variances in close detail. Many companies can
have seasonal sales periods, meaning several products will need a higher stock level at
certain times of the year due to higher demand.
SOLUTION: We need to factor the varying sales trends into planning for inventory levels,
ensuring suppliers can meet different volume requirements at different times.