Good Guy Hospital Supply

Chapter 8: “Good Guy Hospital Supply”

1. Just-in-time (JIT), another word for lean systems, is a philosophy of operations management that emphasizes the minimization of the amount of all the resources, such as time, money, labor. Good Guy’s plan, in my opinion, is not an appropriate use of JIT. Although their idea may be beneficial to the client it is not a proper use of resources, which is what JIT and lean systems emphasize. Lean systems have certain objectives and principles that have been established, some of which GGH$ implementing and some of which they are not. They offer the products the customer wants, when they want it in good quality; yet they do not have a perfect allocation of resources. Their new plan will cut labor costs for the hospitals since GGH$ will be doing the research of how many supplies are used over time as well as doing the restocking from the supply van, but it will increase GGH$’s labor costs and distribution costs such as gas, time and energy. The new plan will be appealing to the hospitals since it will greatly reduce their costs for stocking, ordering, and distributing medical supplies within the facility. With the reduction of the clients costs comes the increase of costs for GGH$; however, it is argued that these increased costs will be offset by the number of newly acquired clients. Even though the costs may be offset and make GGH$ more profitable, their new plan is not a good example of a JIT system. A good example of a JIT system would be the Toyota Production System (TPS). Taciichi Ohno of Toyota created a system to mimic the combination of the Ford mass production system and supermarkets. At Ford, Ohno studied practices such as setup reduction, work standardization, focused factories, ongoing employee training, supply chain integration, and variance control and reduction.GGH$ does implement some of these practices, such as focused factories and over time will have TAKT time flow balancing, but I would suggest that...