Supply Chain Management

JIT and e-Commerce

Layout

• JIT objective: Reduce movement of people and material – Movement is waste!

• JIT requires – Work cells for product families

– Moveable or changeable machines

– Short distances

– Little space for inventory

– Delivery directly to work areas

Work Cell versus Process Layout

Work Cell versus Process Layout

Layout Tactics

• Build work cells for families of products

• Minimize distance

• Design little space for inventory

• Improve employee communication

• Use poka-yoke devices

• Build flexible or movable equipment

• Cross train workers to add flexibility

• Involves timing of operations

• JIT requires – Communicating schedules to suppliers

– Level schedules

– Freezing part of schedule nearest due date

– Small lots

– Kanban techniques

Scheduling

Level Schedules

• Reduce ripple effect of small variations in schedules (e.g., final assembly)

• Production quantities evenly distributed over time (e.g., 7/day)

• Build same mix of products every day – Results in many small lots

– Item Monthly Quantity Daily Quantity A 40 2 B 60 3

A

A A B B B C

JIT Small Lots

Large-Lot Approach

Time

Time

A A B B B C

A A A B B B B B B C C

JIT produces same amount

in same time if setup times

are lowered

Small versus Large Lots

Small lots also increase flexibility to meet

customer demands

Comparison of Level and Large Lot Material-use Approaches

Kanban

• Japanese word for card – Pronounced ‘kahn-bahn’ (not ‘can-ban’)

• Authorizes production from downstream operations – ‘Pulls’ material through plant

• May be a card, flag, verbal signal etc.

• Used often with fixed-size containers – Add or remove containers to change

production rate

Diagram of Outbound Stockpoint with Warning-Signal Marker

Kanban Signals “Pull” Material Through the Process

E-Commerce

The use of computer networks, primarily the internet, to buy and sell products, services,

and information.

E-Business

“… all about cycle time, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage.”

Types of E-Commerce

Business-to business (B2B) Both sides of the transaction are businesses, non-profit organizations, or governments.

Business-to-consumer (B2C) E-commerce transactions where customers are individual consumers

Consumer-to-consumer (C2C) Consumers sell directly to each other.

Consumer-to-business (C2B) Individuals sell services or goods to businesses

Types of E-Commerce Transactions

Business Consumer

Business B2B

GM/Ford/Daimler’s

Covisint exchange

B2C

Amazon, Dell, Net

Grocer.com

Consumer C2B

Priceline, Travelocity

C2C

Ebay

Traditional Medical Supply Chain

Manual processes

Hospital

Group purchasing

organization for small,

independent hospitals Distributor Supplier

On-Line Medical Supply Chain

On-line

Global

Health Care

Automated web-

based processes

Hospital

Group purchasing

organization for small,

independent hospitals Distributor Supplier