Lou Brad N.

De Nobili
1. While JIT system may work in some companies/ industries, it may not work for everyone
since there are certain limitations, problems or issues which can only be solved through
the consideration of the requisites. First, if not managed properly JIT system may lead to
the operations delays and paralysis or in some cases shutdowns. Since the JIT system is
built upon a demand-pull approach which means raw materials and production are based
on the current demand, it necessitates that companies must have a consistent and reliable
supplier to provide for the challenging needs of the system. The absence of a consistent
and reliable supplier would lead to catastrophic delays and shutdown of production due to
the unavailability of raw materials needed. Second, the after-effect of the first limitation
would be loss of potential sales when the factory is paralyzed because of the lack of
supplies needed to produce the orders. Even if there is demand, it will all come to waste
if there is no steady stream of materials from the supplier. Third, the lean model of the
JIT entails a swift approach in order to provide for the immediate customer demands.
While speeding through to get materials, to put materials into production and to deliver of
goods may indicate a strong lean manufacturing model, it can also spell out reduced
times for quality management. If the latter scenario occurs, it may lead to customer
dissatisfaction which could contribute to loss of future sales. To remedy this situation, it
is important to integrate concepts of total productive maintenance and total quality
management to ensure that products are produced in accordance with the specifications
and standards. Fourth is higher ordering and administrative costs. Since raw materials
are made ready and processed only if there is demand, JIT requires a constant and steady
stream of orders. Unlike in the Just in Case setting wherein it is acceptable to have less
frequent bulk orders since the system allows for the retention of large amounts of raw
materials, JIT necessitates the opposite as it favors more frequent delivery of smaller
quantities because of its demand-pull orientation. Since JIT requires frequent delivery of
raw materials, costs attributed to delivery increases. Additionally, since JIT is more
geared towards smaller but more frequent deliveries, it incurs a high opportunity cost
from bulk discounts. Aside from that administrative costs are also higher in JIT
companies since these enterprises require people to handle supplier relations which is
crucial in the JIT setup.