10.5.9 Inventory Management
Traditionally, organisations have been following the concept of economic ordering quantity (EOQ) for effective inventory management.
The presence of excess inventory increases the risk of obsolescence and deterioration, increases the need for warehouse and shop-floor space, and by “pushing” parts through the assembly process encourages a number of wasteful practices.
Just in Time (JIT) inventory management embraces the philosophy of zero inventory in which elimination of waste is the central goal. JIT is a manufacturing system the goal of which is to optimise process and procedures by continuously pursuing waste reduction.
The benefits of JIT are as follows.
- Elimination of extraneous activities
- Less requirement of ...
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