Question 1

JIT after a CatastropheCourse: Productions & Operations Management.Bad GatewayMembers:Student ID: Thi Quc DngBABAIU12234Nguyn Ngc PhBABAIU12057Thi Nht MinhBABAIU12170Nguyn Anh Khi BABAIU12298Nguyn Ngc Tuyn BABAIU12281T Gia Huy BABAIU12071Trn L Quc VitBABAIU12282OUTLINEJIT Definition.Case summary. Discussion questions:If you are Mr. Folley, looking over the devastation at the Oxford plant, what do you do to keep Caterpillars worldwide production running?Given the inherent risk in JIT and the trauma that the companies have experienced, why has JIT survived?What do these experiences, and the continuing popularity of JIT, tell you about just-in-time?What actions or changes in policy do you suggest for Caterpillar?

JIT definition:An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.Case summary:JIT systems are used and tested in real life by many companies in the world:Toyota got JIT tested by fire.Chrysler got JIT tested by terrorist attack.The case concerned about JIT system of Caterpillar:Feb 5th 2008, a storm destroyed Caterpillar facility in Oxford, Mississippi.10-ton heating and air-conditioning units, had fallen onto three critical metal stamping machines.Getting production back to normal would take 6 months.If you are Mr.Folley, looking over the devastation at the Oxford plant, what do you do to keep Caterpillars worldwide production running?5ReusingClear the final product => hiring engineers.Couplings need to reuse.Save the used source.

Affiliating Contact with outside supports such as supply chain in China, Japan

Fixing

Production chain needs to be fixed.Decrease the time of fixing those machines by employ more workers.=> Should be carefully considered to avoid the diminishing of returns. Given the inherent risk in JIT and the trauma that the companies have experienced, why has JIT survived?Reasons for survival

Reduce inventory

Requirement for higher quality

Motivation for standardizationDisadvantage Risk of high loss due to production haltEx: Toyota, in 1997, one Saturday, a fire at Aisin Seiki Companys plant stopped the delivery of all break parts to Toyota. By Tuesday, Toyota had to close down all of its Japanese assembly line. By the time the supply of brake parts had been restored, Toyota had lost an estimated $15 billion in sales.

Benefits of JITReducing costMinimizing waste. Less idle time.Create a more simple practice of quality control.Force the company to focus on production.

Link to the caseIn Caterpillars case, the Oxford plant is the only plant in the world that makes this unique coupling. The couplings link hydraulic hoses on every piece of machinery Caterpillar makes. Depending on a single source and holding little inventory is a risk, but it also keeps firms lean and costs low.

Result More efficient and better quality.Allowing a more fluid approach to production.Minimizes the costs of redesign. What do these experiences, and the continuing popularity of JIT, tell you about just-in-time?JIT is risky, but the cost savings experienced make it :Minimize waste by attacking waste.Exposing problems. Bottles necks .Achieving streamlined production.

Experiences16The continuing popularityMany companies have chosen to adopt the JIT practices. Even through the catastrophic events we discussed today have not stopped any of these companies from continuing with a JIT plan for operational management.

The reason for the continuous support for the JIT practice is the strength of relationships that are formed with the suppliers, each company experiences.The continuing popularityThe bottom line is once a JIT system is successfully implemented the corporation will realize both time and monetary savings.

JIT facilitates a more effective and efficient use of funds.What actions or changes in policy do you suggest ?

Adding some machines at factories that can duplicate some of the couplings.Reviewing operations world-wide.Building another coupling plant outside the U.S :- supply future growth.- provide back-up if there is another crisis.- maintain efficient JIT practices.

Reconstruct the design of its coupling plant:Move the metal stamping machines away from the 10 ton heating and air conditioning unit above.

Have the right balance of efficiency and riskTrim the number of its part variations:- Cut cost.- Easily shifting to another site if disaster strikes.