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Just-In-Time Inventory Approach

The Just-In-Time inventory approach, commonly referred to as JIT, has been adopted by a number of successful companies worldwide. It is a somewhat recent development in operations management that ensures labor, goods and raw materials arrive at the premises exactly when needed for the production process. For the purposes of this assignment, the fast-food corporation McDonald’s was picked as an example since the restaurant industry has widely utilized the JIT approach.

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Mcdonald’s has incorporated JIT in its production process by beginning the cooking process of a burger only when an order is received. The company has all of the necessary ingredients refrigerated on the premises, but they are only cooked and assembled when a purchase is made. This approach facilitates the brand’s commitment to providing fresh food and great taste to its numerous customers (Hirano, 2019). When applied to operations, JIT benefits Mcdonald’s by aiding the firm to maintain the consistency of its products, which has been named the biggest selling point for the firm.

In Mcdonald’s operations, JIT is used partially, with the ingredients being delivered and sorted in advance, but arranged and cooked only after the order. In this case, the term product can be applied to the food preparation process, since the assembly of a product the customer has purchased begins on the spot. JIT facilitates the company’s flexibility to the consumers’ specific requests and customizations, ensuring just the right quality of the order. The right quantity is ensured by the timing of food preparation which prevents the team from generating food waste and not utilizing the available resources.

To support Mcdonald’s operations, the Uniform Plant Loading might be incorporated to improve the structure of the firm’s performance. It is important to specify that Mcdonald’s is a multinational company with billions of dollars of annual profit. Yet since the chain consists of franchisees, some of the locations are demonstrating poorer results than others, perhaps due to their geographical positioning. The Uniform Plan Loading might be instrumental in countering such issues and increasing the profits of less popular Mcdonald’s outlets.

The system involves setting the monthly output plans for the firm with very little flexibility allowed and the target remaining fixed until its revision next month. Only minor changes to the plan are allowed, and even these are considered to be undesirable. This approach is based on the aforementioned idea of consistency, as it would allow the firm to smoothen its production process (Hirano, 2019). As Mcdonald’s production process is fully standardized, it would be reasonable to expect the firm to have already engaged with the Uniform Plan Loading.

Waste reduction and supply chain optimization are some of the most important goals for models such as JIT. The problem of overproduction is now more relevant than ever considering the worldwide ecological crisis. By combining JIT and a Uniform Plan Loading, a firm would quickly develop a production routine. The responsible department would then be able to communicate to the suppliers the exact number of raw materials needed, thus giving greater structure to their communication. Furthermore, the implementation of the JIT model could lead to the revision of the supplier relationships, with the company being able to examine these relationships and prioritize the most efficient partnerships. The reduction in waste would also lead to a decrease in supply-associated costs, hypothetically allowing the company to buy from suppliers with higher rates and higher material quality.

Reference

Hirano, H. (2019). JIT implementation manual: The complete guide to just-in-time manufacturing, (2nd ed.). CRC Press.

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StudyCorgi. (2022, September 25). Just-In-Time Inventory Approach. Retrieved from https://studycorgi.com/just-in-time-inventory-approach/

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