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Sorry for the Delay - Jaguar Answer
With Ford electing to produce the jaguar line at a dedicated plant in Halewood, UK, it set among its goals to provide exceptional quality using lean production. Just in Time (JIT) production is a primary method of JIT production and offers several important advantages, with only a few disadvantages in the case of Jaguar.
JIT is a stock management system that emphasizes keeping a minimum of stock on hand, relying on suppliers delivering reorders just before the stocks are needed. This is different than more traditional Just in Case (JIC) production systems, where production managers tend to keep larger stock levels on hand. With the Halewood plant being physically located beside the main suppliers for its materials, the implementation of a JIT system is possible due to increased ease of coordination with suppliers and minimal lead times.
For Halewood, several advantages make JIT techniques to be highly desirable. Perhaps the most important is that the financial considerations of the production process will be improved. Working capital required for JIT is drastically reduced, since less money is tied up into stocks, allowing investment to be used elsewhere. Additionally there should be reduced expenses, since the company saves on storage costs, insurance and other costs associated with holding larger levels of stock. One result of all of this can be a lower break-even point for jaguar’s products, since variable costs should decrease. This then leads to higher contribution from each unit sold, and ultimately higher profits. Finally, the JIT system falls well in line with Jaguar’s emphasis on team building, since employee participation is critical to success. These benefits give JIT an advantage over JIC systems at Jaguar.
Disadvantages are limited but important. The greatest disadvantage for Jaguar is the potential for production stoppage due to failure of suppliers to deliver stock on time. While this potential problem is minimized due to their nearby locations, there still are dangers. For example, should employee work issues end with one of the suppliers suffering a strike or other work stoppage, deliveries could halt. Another serious disadvantage is with JIT there is generally limited time for quality control checks on received deliveries. Therefore there is a danger that substandard materials could find their way into Jaguar products, despite the Halewood emphasis on high quality. These points make JIT more dangerous to use than traditional JIC systems. However, the location of suppliers so close to the Halewood plant should allow Jaguar to monitor suppliers more closely and therefor minimize these disadvantages.
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