Modern Techniques:

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Vendor-managed inventory (VMI)- An inventory planning and fulfillment technique in which a supplier is responsible for monitoring and restocking customer inventory at the appropriate time to maintain predefined levels. The vendor is given access to current customer inventory, forecast and sales order information and initiates replenishment as required.

 

JIT II, a customer-supplier partnership concept pioneered at Bose Corporation and now practiced by major companies and their suppliers, can aid in cutting both design and response lead time. This is done through system integration, a basic process strategy of time-based competition. In a JIT II relationship, a supplier’s sales representative works full-time in a customer firm while being paid by the supplier. The customer serves as the host organization, and the supplier representative-referred to as an in-plant representative, or “in-plant”–functions as an employee of the customer’s purchasing department, attending planning meetings and determining material needs. The in-plant is then authorized to purchase materials from the supplier for the customer.

 

In conventional JIT purchasing, customers and suppliers conduct themselves as partners rather than as adversaries. These partnerships provide long-term contracts to single-source suppliers. In return for the cumulative volume of business, the customer receives frequent deliveries in small quantities of high-quality goods. Benefits reported by JIT purchasing customers include improved communication between customer and supplier and the reduction of lead times, on-hand inventories, space needed for storage, and paperwork.

JIT approach became a modern production system seeking to implant concept of stockless production. JIT embraced a variety of manufacturing concepts like reduced lot sizes, quick switch over [SMED], load leveling [response to tact time], group technology, statistical process control [control charts] preventive maintenance and quality circles.

 

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