MANAGING OPERATIONS GLOBALLY INTERNATIONAL OUTSOURCING RISKS AND JIT
Uncertainties such as natural disasters like the unfortunate Tsunami in 2011 in Japan have necessitated manufacturers rethink the appropriateness of the JIT in manufacturing. Despite JIT’s shortcomings, it remains the best managerial philosophy due to its characteristics that help identify and solve international outsourcing risks, matches operations management theories, and strengthens inventory models. Just in time overview and History As noted earlier, JIT originated from Japan mainly from the Toyota Company. The philosophy culminated from Japan’s lack of sufficient space for big companies, coupled with its lack of adequate natural resources. This necessitated the firms to find ways of enhancing efficiencies and reducing manufacturing wastages. In the eyes of an investor, such conflicts have the potential to disrupt business in both the host country and the UK, thus stopping operations, mainly if the materials sourced from the country are critical to the activities of the organization.
Given the circumstance, efficiency, planning, and strategic access to material become critical for the organization. JIT becomes an all-important philosophy to manufacturers in such cases, given that JIT is capable of addressing most of the issues associated with political instability. First, one of the characteristics of JIT is that it works on a concept of working closely with few but very reliable suppliers (Kaizen-Expert, 2013). In JIT the company ensures that the suppliers can supply the right quality and quantity just in time to meet the exact production needs. For example, Balakrishnan, Bowen, and Eckstein (2008) describe a strategic framework for managing supply chain failure for manufacturers using JIT philosophy. Therefore, even though JIT is prone to disruptions, the proactive and reactive mitigation measure in JIT, as Balakrishnan, Bowen, and Eckstein (2008) describe, allows the management to utilize the benefits of JIT, without compromising safety from possible disruptions.
Thus, Just in Time philosophy is not weak or prone to disruptions per se. JIT, therefore, remains a good philosophy for material management even when manufacturers are outsourcing internationally. Labour Issues Human resources are a vital component of the supply chain. With that, the manufacturer, in collaboration with the supply, may avert the possibility of a labor strike, or at the same time reduce the possible negative impacts if the strike happens. Therefore, JIT remains the best management philosophy for UK manufacturers, regardless of the labor-related risks in international outsourcing. Terrorist Attacks The international outsourcing is also prone to disruptions culminating from terrorist activities. Terrorist attack signifies that some people are not pleased with how a country such as UK or US conducts its business.
As a result, the terrorists sabotage the economy, through killing people working for the states considered unfriendly. Operation Management Theories Other than the ability of JIT to solve some potential disruption issues, JIT remains a sound management philosophy because it supports operation management theories. Some of the operation management theories include reconfigurable manufacturing systems, business process redesign, six sigma, and lean manufacturing (Online. kettering. edu, 2016). JIT philosophy best reflects the principles of lean manufacturing. net, n. d. Two methods of inventory model include Fixed Reorder Quantity (FRQ )System and Fixed Reorder Period System. The diagram below exhibits a typical FRQ Inventory Model: Fixed Reorder Quantity System Sources: http://www. whatissixsigma. Some scholars argue that JIT increases the risk of disruption (Ye and Abe, 2012).
This would allude those other techniques are better than JIT. Nonetheless, none of them is immune to threats of disruptions. For example, the impacts of natural calamities would cut across all firms in the supply chain regardless of the management philosophy they use. Thus, JIT is not in a way inferior regarding mitigating or responding to risk of disruption. Analyzing the benefits of lean manufacturing and value stream mapping via simulation: A process sector case study. International Journal of production economics, 107(1), pp. Aggarwal, S. MRP, JIT, OPT, FMS?. [online] Harvard Business Review. A strategic framework for managing failure in JIT supply chains. Čiarnienė, R. and Vienažindienė, M. Lean manufacturing: theory and practice. Economics and management, 17(2), pp. Available at: http://www.
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