Just in Time in Kalamazoo

1063 Words5 Pages
Case 2-1 Just-in-Time in Kalamazoo Summary and Assessment: President, Jim Ballenger’s, firm specializes in manufactured mini motor homes in Kalamazoo, Michigan. The majority of the mini motor homes are assembled from components purchased from outside vendors. It has come to Jim’s attention that transportation and inventory cost contributed to a relatively large portion of his components parts expenses. In an effort to reduce cost Mr. Ballenger considers implementing the just-in-time (JIT) system which was developed by the Toyota Motor Company. Mr. Ballenger and the rest of his management team are well aware of key principles, requirements and trade-offs that are necessary to occur in order to allow JIT system be successfully…show more content…
4. If the JIT system is adopted, are there safety stocks of any item that should be maintained? If so, which ones and how much? A: Safety stock is any inventory that is held in addition to cycle stock to guard against uncertainty in demand or lead time (Murphy & Wood, 2011, p.134). If the JIT system is adopted, I would recommend the CD players due to the high cost ($136) and long distance (1,800 miles) compared to any other component. If there was an issue with demand or lead time, Mr. Ballenger would achieve the most favorable cost reduction by purchasing 10 to match the number of motor homes produced a week. 5. If the JIT system is adopted, what changes, if any, should occur in the relationship between Ballenger’s firm and his suppliers of components? Discuss. A: If the JIT system gets adopted by Ballenger’s firm, a number of changes must occur. One of the most important is the change aimed at improving and strengthening relationships with the suppliers. Murphy and Wood (2011) wrote that the just-in-time system has its principles that must be implemented and followed to allow JIT reach its highest potential. As a result, the suppliers’ role must change form passive onlookers to active participants of the production process (p.41). Ballenger’s firm must encourage the suppliers to be more interested in providing better quality service and
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