Smith Corporation

Answer

Implementation of a JIT inventory system

1. Steps needed to determine value adding production activities

            There mainly three broad steps required to determine value adding activities. The first step is identifying activities that add value in the perspective of the customer.  These are mainly those activities that a customer would be willing to pay for. Activities that add no value to customers are removed. The next step is defining what constitutes the value chain in the factory by identifying materials and information required to deliver products to the customer (Raman & Dubey, 2019).  This step assists in identifying lead time, bottle necks and where inventory comes into play among others. The analyst is able to have a picture of the manufacturing process from start to end.  All non- value adding activities are identified at this point. Elimination is the last step in determining value adding production activities. Activities that consume resources, add no value to the product and customers are unwilling to pay for are classified as waste. These activities should, therefore, be eliminated (Gert, 2016).

            Other steps that could also be used include reducing inventory to reveal waste in the factory.  This enables the weaknesses of the system of production to be realized and addressed. Demand pull system of manufacturing is the next. In this step, production should be tied to demand of a particular product by a customer or a process that is performed. A product should only be produced if it is required. Products should not be produced just to be stored (Sheehan, 2019). The third step is reducing lot sizes and identifying quick set ups as it lowers unit costs and reduces lead times. This enables uniform loading and ensures everything is done at the right time. Making resources flexible is another way of eliminating non value adding activities. For example, employees should be able to handle multiple tasks (Gert, 2016).

1. The Total Cycle Time in Days

The total cycle time is 45 days

1. The Manufacturing Efficiency Ratio

Manufacturing activity takeS 31 days/total cycle time i.e. 31/45= 69%. The manufacturing efficiency ratio is 69%

Manufacturing activities start from moving materials to packaging finished goods and the number of days to perform them is 31 days.

1. The Activities that might be Reduced or Eliminated to Implement an efficient JIT System

            The activities that may be reduced or eliminated to implement an efficient JIT system include inspecting materials and receiving materials. Receiving materials will be reduced as not many materials will be received from suppliers as compared to the past. Inspecting materials will also be eliminated. Materials will be inspected at the supplier’s warehouse to ensure only acceptable materials are received.  Storing materials might be eliminated as there will no need to store materials Gert, 2016). The company will only buy what is required to meet demand from a client.  Moving materials into production will be reduced as fewer materials will require to be move unlike in the past.  Setting up production will be reduced as quick steps to set up will be implemented. Cutting materials, assembling materials will be reduced. This is because only what is needed will be produced and not producing just to store. Painting finished products and packaging finished products will be combined to reduce unnecessary movement.  This will enhance efficiency (Gert, 2016).