AC 3.

2 Critically evaluate the role of the

principles of just-in-time management
§ Just-in-time, or JIT, is an inventory management method in which goods are
received from suppliers only as they are needed.

§ The main objective of this method is to reduce inventory holding costs and
increase inventory turnover.

§ Effects of a just-in-time inventory management system are:

- Reduces inventory waste
- Decreases warehouse holding cost
- Give the manufacturer more control
- Local sourcing
- Smaller investments
 Advantages
§ Waste reduction
§ Improved efficiency
§ Greater productivity
§ Smoother production flow
§ Lower costs
§ Improve quality

Disadvantages
§ Missed opportunities
AC 3.3 Provide criteria for assessing an
organisation’s suppliers
§ Procurement include different types of acquisition (purchasing,

rental, contracting, and so on) as well as the associated work of

selecting suppliers, negotiating, agreeing terms, expediting,
monitoring supplier performance, materials handling, transport,
warehousing and receiving goods from suppliers
§ organising a reliable and uninterrupted flow of materials into an
organisation
§ working closely with user departments, developing relationships
and understanding their needs
§ f inding good suppliers, working closely with them and
developing beneficial relationships
§ buying the right materials and making sure that they have
acceptable quality, arrive at the time and place needed, and meet
any other requirements
§ negotiating good prices and conditions

§ keeping stocks low, considering inventory policies, investment,

standard and readily available materials, and so on
§ The most important part of procurement is finding the right supplier.
§ The supplier must be capable of doing the work, giving high quality,
working to a schedule, with acceptable costs, and so on.
§ Qualified suppliers:
- are financially secure with good long-term prospects
- have the ability and capacity to supply the necessary materials
- accurately deliver the requested materials
- send materials of guaranteed high quality
- deliver reliably, on time with short lead times
- quote acceptable prices and financing arrangements
 - are flexible to customers’ needs and changes
- are experienced and have expertise in their products
- have earned a good reputation
- use convenient and easy procurement systems
- have been used successfully in the past and can develop
long-term relationships.
AC 4.1 Discuss views on quality and
quality assurance and why quality plays
an important role in today economy
§ Quality assurance is a process used to learn if product or service is up to
standards.
§ The idea is to deliver a product or service that consistently keeps up a
high quality.
§ It’s a proactive approach where defects are detected before a product
or service goes public. This is vital to customer satisfaction. When
customers are happy, your company is in a much better position to do
well.
§ Quality assurance uses auditors, sometimes independent and
sometimes in-house, to evaluate the methods that go into making
products and providing services.
 Improving
Production
Efficiency

Creating
Better Work
Cost
Environment
Efficiency

Encouraging Maintaining
the Business Customer
Growth Trust