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CMA Intermediate · Operations Management and Strategic Management · Lean Operations and JIT

A Pune auto-components firm is introducing JIT. Which step is most consistent with JIT implementation with its suppliers?

JIT implementation favours long-term relationships with a small number of reliable suppliers who deliver small lots frequently at assured quality. This reduces inventory and inspection effort. Large infrequent orders, buffer stocks and heavy receiving inspection all conflict with JIT principles of minimal stock and quality at source.

  1. APlacing a few large orders yearly with many competing suppliers to get volume discounts
  2. BBuilding long-term relationships with a small number of reliable suppliers who deliver small lots frequently with high qualityCorrect
  3. CHolding extra buffer stock to protect against supplier delays
  4. DInspecting every incoming consignment at the receiving dock to catch defects

Explanation

JIT relies on few, dependable suppliers with long-term partnerships, frequent small deliveries and quality built in at source. Large infrequent orders and buffer stocks build inventory, which JIT tries to eliminate. Heavy incoming inspection signals a lack of supplier quality assurance.

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