A just in time manufacturing system is a system where once the level of stock is getting very low, it will re order more stock to make sure there is enough for when the stock is actually all gone. Businesses using Just in Time manufacturing system will need to have quite a close relationship with its suppliers, because they need them to be reliable and always getting their supplies to them just in time for when they want it.
An advantage of using a Just in Time system is that you can save storage space and money because you won’t need to have large places for keeping the stock as you only order it when you have a small amount and just before you need it. Another advantage of a JIT system is that you are using the stock quite quickly so there is no need to worry about it perishing or becoming out of date. If the change in demand suddenly occurs or trends change, the business can easily change their products or get in new stock to meet this change, they won’t need to use up loads of old stock.
A disadvantage of JIT is if you suddenly get larger orders of products, you would need to wait until you get more supplies before you can complete the orders as you have no back up stock for spares.
Stockpile Warehouse manufacturing is the opposite of Just in Time manufacturing. This is where the business has large supplies of stock kept in large storage spaces, like warehouses. This is good because they have enough stock to complete all their tasks, especially if they suddenly get higher demands. This is where stockpile warehouse is better than the Just in Time system. Another advantage of warehouse manufacturing is you could possibly look around to get the best suppliers, which could save you money as you don’t need to have as much of a relationship with them as you would with JIT manufacturing.
A disadvantage with stockpile warehouse manufacturing is that you would need to have large storage spaces for storing all the stock. This could cost the business quite a lot of money from the rent.
A2 ICT 