Inventory Management Practice

Lovely Pizza main line of business is variety of pizza.We primarily sell spaghetti,icecreams and soft drinks.Inventory management in Lovely Pizza that we follow a Just-in-Time (JIT) system of inventory management.JIT,as the name suggests,is the system of supplying products to customers as soon as they have ordered for it, with minimal delay between placing the order and getting it in hand.We doesn’t begin to cook or assemble or preheat their stuff until they receive a customer order.

Under JIT system,we used pull method in which customer demand activates production of the item.With the pull method,for instance customers purchase pizzas,the final assembler checks the inventory level of burgers and when they are almost depleted, orders six more.Our pizzas maker produces the six pizzas and gives the tray to the final assembler,who completes the assembly and places the burgers in the inventory for sale.The pull method is better for the production of pizzas.The two workers can coordinate the two workstations to keep inventory low, important because of the seven-minute time limit.The production of pizzas is a highly repetitive process,setup times and process times are low,and the flow of materials is well defined.There is no need to produce to anticipated needs more than a few minutes ahead.Hence,our company tend to have highly repetitive manufacturing processes and well-defined material flows by using Just-in-Time systems because the pull method allows closer control of inventory and production at the workstations.

Just-in-Time system has brought to the Lovely Pizza Operations because of some benefit that we have already highlighted.First,by using JIT system,we could improved our quality of food.The pizza are made fresh for the customer and thus provide maximum satisfaction.There is no chance of offering stale food to the customer. Higher customer satisfaction leads to customer retention and increased sales. The customer resists the impulse to try out rival brands till heor she is deriving maximum satisfaction from the brand in question.JIT system leads to a better customer service.Our staff is more calm and composed and offers better service to the customers.This higher customer service is subject to the ability to produce faster burgers.Thus,we are able to handle the demand a lot better.We don’t have to

waste time in calculating the estimated sales hour by hour and maintain an inventory.JIT provides us for an attractive and cost cutting mechanism but we need to weigh the risks and analyze the associated consequences that might happen.Our priority in our company is achieve a better costs.High holding costs and low ordering costs were the factors that drove the Just-in-Time system to the market.JIT helps reducing the lead times and hence safety stock. A very fast pizzas making technology makes JIT a viable option for our company.Safety time exists due to variability in demand and variability in lead times from suppliers.It has also led us to reduce drastically the safety costs.The ability to lower the operating costs makes JIT a highly feasible solution. .means we maintaining low costs to achieve competitive advantage.

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