Production Management Section 2

Production Management

Phase 2:

2.1 Just in time (JIT) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs.

2.2 The bakery can cut back in the waste by meeting the demands of the customers without over producing stock so that there is no stale food that cannot be sold. They could attempt to source as many of their raw materials required from a single supplier in an effort to reduced transportation costs. They could also cook more products at one time in the oven as to save on electricity. They could also set up a program where the food that is too old to sell at the bakery can be sold at a cheaper price to under privileged schools or orphanages to claim back a small fee to cover some the expense of the lost goods.

2.3 The just in time philosophy can be implemented in a bakery quite easily and effectively as the inventory they need is minimal from day to day use. Thus the bakery can organize with the suppliers to drop off the required inventory for the day in the morning or as late as possible the night before. This can be sustained by setting up a strong connection with a supplier that is reliable and will be able to meet the demands of the bakery i.e. being able to deliver the required inventory such as the required ingredients for baking on a daily basis. They can also implement a system where the customer places the order the day before so that they only produce to demand.

2.4 The JIT philosophy is perfect for a bakery as the fresher the cooking ingredients the better the food tastes and thus will lead to increased sales. It will also allow the bakery to cut down on costs and thus make a larger turnover. It would improve their general cash flow as the bakery would have a reduced time between debts and being able to pay them back thus having a greater some of liquid assets at any one time. It also allows for the bakery to be able to maintain the products for longer...