Posted on 05/23/2011 3:21:47 PM PDT by Beaten Valve
Isn’t “just in time” a free market response to government taxation of inventory?
That one slipped under my radar. Boy, does Obama neglect ANYTHING to make our life more inefficient and expensive?
Perhaps in part, but it’s also an issue of not tying up your cash too.
While I have been a firm believer in lean inventory as long as you cover your bases, I do believe there’s a case to be made for avoiding being so short that emergencies cause your stores to run out almost immediately.
Well in part but it is more than just that. The idea is to have youir cash flow tied up in its most productive use. Stockpiled inventory does necessarily produce income but money in the bank draws interest.
More than anything JIT is about maximizing efficiency.
I like building to a kan ban, although only one of our customers ever used it religiously.
The concept of “just in time” inventory control has a lot as aspects.
Tax on inventory is one issue, but not the primary issue.
Excellent point that completely slipped by me..
No, not by the measure of a "one off" occurrence... It should be changed because it is a crappy way to do business. I think that JIT has done almost as much damage as "planned obsolescence" has... Doing to inventory what planned obsolescence did to product.
Seems to me nothing more than the sky is falling, the sky is falling.
The factory I used to work in was fined something like 10 grand per hour for every hour our GM recipient plant was down due to a lack of parts.
In a perfect world it wouldn’t happen but things happen, machines break and suppliers don’t supply.
JIT was exactly that!
And one company bean-counter starts it and demands his suppliers deliver the goods needed for assembly of his product.
Then the bean-counter at the supplier says, "Hey! That makes sense." and demands his suppliers do the same for his company.
Less warehouse space, less overhead, less "closed for inventory days", less personnel.
And in case of "Whoops we forgot to order that!" UPS Next Day Air and FEDEX ride to the rescue.
**but things happen, machines break and suppliers don’t supply.**
and Trucks break down, and at $5.00+/gallon diesel, seeing lot of trucks being PARKED with FOR SALE signs in them. That’s not going to help the JIT either.
And as long as the taxpayers can pick up the pieces when you're unable to cover, then it's a smart gamble (tru of any leveraging scheme, not just JIT). Employers no longer have to consider long-term consequences, and "efficiency" is only local--JIT is less efficient in the broader picture.
Jackrabbit starts and jamming on the brakes might be seen as "more efficient" in getting you to a destination quicker, but it's not more fuel efficient. And when wear and tear are considered, other inefficiencies appear.
But since it's "efficient" in the short-term and burdens can be shared with our current economic system (profits are private; losses are shared), it's the rational choice.
BTW, I understand that you were explaining the intent of JIT and I hope you're not offended at my marking up your comment, since you're right about the intent and claims of JIT.
I was working during a new product launch when we had all 170,000 Cadillac door panels we had done returned for a design flaw. (A metal stud inside the door was ripping side air bags)
We ended up hiring 100 temps to dismantle the doors so we could reassemble them with that single stud ground down with a die grinder.
Just-In-Time = Oh-Shit-We're-Out
And unions never ever strike...
We had a no strike clause in our contract. The UAW picketed our shop over it. LOL idiots.
I worked 3 years in a captive job shop supplying parts for Ford and we delivered a few over 50,000 McPherson struts each week split between two different assembly plants. We never missed a shipment in the time I was there.
This all reminds me of an old story told about Henry Ford.
In the early days, the contract with the supplier of the headlights to the Model-A detailed not only the specifications for the headlights but also the packaging in which they were to be delivered.
There were to be two lights per box; the boxes were to built of oak slats; the boxes were to be of certain dimensions, and the headlights should be packed with a certain kind of straw.
The supplier wanted the business, and so they complied with Ford’s demands.
Later they discovered that the boxes they shipped the headlights in were being knocked apart to make the floor boards and the straw that was used for packing material was being used to stuff the seats.
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