Murphy Case Analysis Essay

Just-In-Time Concept.Just-In-time manu pointuring, or JIT, is a focus philosophy aimed at eliminating manufacturing wastes by producing only(prenominal) the right amount and combination of parts at the right place at the right time. This is based on the fact that wastes return from any activity that adds cost without adding value to the product.The goal of JIT, is to pick at the presence of non-value-adding operations and non-moving inventories in the issue line. This volition result in shorter throughput times, better on-time deli rattling performance, high uper equipment utilization, lesser space requirement, lower costs, and great profits. The aboriginal behind a successful death penalty of JIT is the reduction of ancestry levels at the various beams of the production line to the absolute minimum.This necessitates nifty coordination between stations such that every station produces only the adopt volume that the next station needs. On the other hand, a station pulls in only the exact volume that it needs from the preceding station. In this case, Murphys management started the effectuation of JIT without wholly understanding the innovation the poor performance was caused by want of live onledge about JIT and lack of communication/coordination between the departments.Problems at MurphyThe CEO of Murphy Manufacturing wish the idea of JIT (reducing inventory holding cost while improving production efficiency) based on a few constitute gots he read, thus he wanted to implement this concept in his company even though the present MRP system had been working very well for a presbyopic time. On the other hand, Joe Vollbrach, Vice President of Operations for Murphy Manufacturing, initiated the implementation process based on the way it was working in the book examples he read without doing any feasibility study a or having a complete understanding about how to implement JIT concept in a vitiated(a) manufacturing environment like which Murphy is in.The result is disastrous, purchase department be constantly localizeing tangibles at very high cost the shipping/receiving department be harassed by perennial loading/unloading task production efficiency was down referable to lack of production materials and no clear production schedule sales people has to deal with angry customers because most the order arent shipped/delivered on time.General JIT Implementation GuidelinesSince JIT encompasses a number of functional areas of the company, line of longitude management support are a must. Full acceptance by top management is required to em baron middle management to overcome the unavoidable roadblocks in implementation. In this case, John should take the initiative to be the maven of JIT concept and provide the full support for implementation.Second, reproduction and education as a storeamental requirement for JIT implementation in order to raise a significant change in attitude of the workforce that ordain create an e nvironment conducive to completing the implementation. Training courses should be do available for employees to amply understand JIT concept and harness it.Third, it is important that JIT is seen as a philosophy rather than a set of add-on techniques to new practices. The company must question why and how it uses JIT and be able to compute out the results of undertaking JIT and incorporate them into its marketplace strategy. By adhering to these guidelines on implementation and instill the knowledge of JIT concept to entire employees at Murphys, the passing process to JIT will go smoothly and best JIT implementation techniques will be utilized.The pros/cons of implementing JIT in Sm altogether Manufacturing EnterprisesMost publications discussing JIT implementation focus on abundant manufacturing firms, the environment in which the concepts arose. Because of the limitations that subtle manufacturing enterprises face, which include limited staffing and material resources and r educed bargaining power with customers suppliers and financial institutions, it is not clear that all JITcomp angiotensin-converting enzyments are applicable to every environment. Thus choosing the right JIT implementation strategy is crucial for Murphys future successes.Most depleted Manufacturing Enterprises face heavily on a few major customers, thus commonly suffer fluctuating demand from these key customers. In regard to marketer relationships, their purchase volume is not titanic enough to give them leverage over their suppliers to purchase in a small batch surface with a good quality at a definite time. Compared to large firms, Small Manufacturing Enterprises commonly have limited free cash to fund investment in new production concepts or technologies. They also lack bargaining power with their creditors and debtors, and have difficulties in quiverting loans from financial institution. Hence, send planning is constrained by cash flow maintenance. Consequently, if Sma ll Manufacturing Enterprises get involved in innovative projects at all, they will focus on projects with short term returns and overlook initiatives promoting long-term results.Small Manufacturing Enterprises also have limited non-cash resources (machinery or people). They do not normally have particularized departments such as a training department or an plan department. With limited management staff in that location is a small pussycat for potential champions of new techniques. Also, small firms may be so small that a change in production cannot be implemented without bear on the entire plant. This is another barrier for Small Manufacturing Enterprises to improve their operations as they have to risk the whole factory in order to know whether a certain technique is appropriate or not to the company. Which is very true in this accompaniment, slight modification in any one of the major operation departments, will affect the entire company. Thus, every measurement has to be carefully analyzed and backup techniques needs to be developed.However, there are also several advantages for small manufacturers compared to big ones. Small firms normally do not have union contracts and usually have fewer problems with resistance to change compared to large companies. A flatter organization is ordinary in small firms and it fosters more frequent open communication. Therefore, the decision devising process is simpler and the result is conveyed faster throughout the employees. Compared to largefirms, small firms are used to working in smaller batches and are more addicted to a flexible response to demand changes.Problems in Implementing JIT ComponentsFirst, Cross training is common for small manufacturers because of the need to cover absent employees from a small labor pool and is also easier to implement than in large companies. The only problem is that extensive training is costly. Small manufacturers may train key employees individually and ask them to impart their knowledge to other worker. In this case, all the middle management can learn about JIT concept then passing it to production employees.Second, most small companies are very leechlike on a few major customers. They lack bargaining power with their key customers and will not be able to compel these customers to order on a stable demand rate. The most desirable situation would be the cooperation of their customers in sharing their forecast demand and production schedule. Achieving this may be limited by bargaining power and therefore the result may be production based on inaccurate forecasts resulting in using finished goods inventory as a buffer. Production take aim can be a great barrier for small businesses to fully adopt JIT.Third, JIT Purchasing is normally implemented as the last component, curiously for small manufacturers, due toe lack of bargaining power with their suppliers. Small manufacturers normally do not give enough sales to their vendors and are forced to ord er in large batches and store a large amount of raw material or they will suffer a higher cost to get the materials just-in-time. All these potential problems need to be studied, when implementing the JIT concept at Murphy.