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Chapter76JITand‘quickresponse’logisticsContent1.pushandpullQuestion1Question2EssentiallyJITisa‘pull’conceptwheredemandattheendofthepipelinepullsproductstowardsthemarketandbehindthoseproductstheflowofcomponentsisalsodeterminedbythatsamedemand.Question3Push&pullQuestion4Question5Question6Question7EOQmodelEOQmodelQuestion8Question9Theyfrequentlyleadtostocklevelsbeinghigherorlowerthannecessary,especiallywhentherateofdemandmaychangeoroccursindiscrete‘lumps’.Thislattersituationfrequentlyoccurswhendemandforanitemis‘dependent’upondemandforanotheritem.Question10Conversely,thedemandforagivenitemistermed‘independent’whensuchdemandisunrelatedtodemandforotheritems—whenitisnotafunctionofdemandforotheritems.Thisdistinctioniscrucialbecausewhilstindependentdemandmaybeforecastusingtraditionalmethods,dependentdemandmustbecalculated,basedonthedemandatthenextlevelinthelogisticschain.2.TheJapanesephilosophyQuestion1InventoryhidestheproblemsThelevelofwatershouldbereducedQuestion2KanbanProductionControlSystemsQuestion3Question4Reducingset-upcosts/orderingcosts3.ImplicationsforlogisticsThebasicprincipleofJITlogisticsare:(1)allelementsofthechainaresynchronized(2)earlyidentificationofshippingandreplenishmentrequirements(3)highestlevelofplanningdisciplineTheaimofJITQuestionPre-requisitesforsuccessfulJITJustificationforJIT&synchronousdelivery4.‘Quickresponse’logisticsQuestion1Question2QRisobviouslyaclassiccaseofthesubstitutionofinformationforinventory.whilstQRmayhaveahighfixedcosttheincrementalcostsofserviceimprovementsarerelativelylow.CostAfurtherfeatureinfavorofQRsystemisthatbyspeedingupprocessingtimeinthesystem,cumulativeleadtimesarereduced.Thiscanthenresultinlowerinventoryandthusfurtherreduceresponsivetimes.Ineffecta‘virtuouscircle’!Virtuouscircleinlogistics5.VendormanagedinventoryTraditionalmode:customersplaceordersontheirsuppliers,IthasthreeproblemsThesupplierisforcedtomakeforecastswhichleadstounnecessarysafetystocksThesupplierisoftenfacedwithunexpectedshort-termdemandswhichle
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