Saturday, June 07, 2008

Rosewood Case Study: JIT Discussion

Rosewood Case Study

JIT Advantages for Rosewood:

*Shorten Production Lead Times
*Reduce Inventories

In concert with bar coding technologies inventory monitoring will enable Rosewood to keep track of materials from source of purchase to point of sale. This could be a rocky beginning to resolving inefficiencies in the overall operations but with a steady stock-piling it could create value for the company. In selecting new suppliers in Brazil Rosewood may be able to determine best value in introducing bar coding systems there under terms of contract.

*Increase Quality

Quality of product will be more easily controlled. The production and traffic schedule may benefit from simple GANTT diagrams and load balancing vis a vis Poisson /Bayesian methods (hip pocket calculations) which might enable cellular manufacturing layouts to provide a more effective use of time and manpower.

*Improve Relations
*Keep Improving

Reaction to possible market demand may them be concentrated on assembly to match orders. It may be assumed that Rosewood employees are similar to their bosses and prefer a quality work environment which approaches the furnishings as the work of guild-craft or artisan-ship which provides ample opportunities to develop company-sourced quality improvement suggestions and methods which reflect the commitment of the leadership to a better product and not necessarily a line manufacturing environment.

JIT Disadvantages for Rosewood:

*Price Disadvantages
*Distance From Suppliers

Rosewood may not require the kinds of volume purchases which might easily reduce shipping and discount prices on a distant and premium sourced material. It would work better for alternative Canadian hardwoods sourced veneers.

*Lack of Concessions

While inventory may be more easily monitored with some reductions a full extension to the entire supply chain may be impossible due to distances in suppliers which exceed 2000 km which will minimize the benefits which volume pricing concessions would bring. In addition Distribution inventory may heavily rely on continued warehousing of materials and products at distance. It has yet to be determined if purchase volumes reflect demand variation annually on a seasonal or cyclical basis.

Cost savings in product management may be found in reducing poor quality veneers however without compliance upstream in the supply chain defective materials or those damaged enroute may continue to be shipped to manufacturing before they are rejected which remains wasteful. It will be impossible to locate local suppliers of rain-forest hardwoods to implement a growth oriented JIT system.

Canadian Hardwood Plywood and Veneer Association


*Reduce Inventory

Zero inventory might be possible with introduction of a lower cost and lower priced line of Canadian hardwood veneered furnishing products. This would provide a secondary niche category if necessary for explosive growth.

*Focus On Quality and Continuous Improvement

A focus on gemba kaizen rather than exclusively JIT (another Japanese management sytem which borrows much from Deming and TQM) might prove useful in encouraging the Rosewood workforce to improve those systems within which they may find tangible improvements over the quality of their individual and collective work to improve the company's overall manufacturing and customer delivery process. Consulting and benchmarking direct and indriect competitors may be significant recommendation. A series of questions may be raised to formulate a flexible improvement plan:

S — Situation: "Where are we now?"
T — Target: "Where do we want to be?"
R — Research: "What research do we need?"
I — Implementation: "What is our plan?"
D — Do it! "Let's do it!"
E — Evaluate: "What's working? What's not?"
S — Standardize: "How will we standardize?"

This type of initial planning may cost little and reward much.

Gemba Research

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