Just In Time (JIT) Philosophy And Characteristics Of A Service

1.Provide a Detailed Description of what you understand to be the concept in the practice of operations and technology

2.Outline the characteristics or attributes of service.  For each of these characteristic provide an example to show your understandings. 

JIT Concept in the practice of Operations and Technology

With the increasing competition around the globe, the business environment is changing at a fast pace thereby pressurizing the manufacturers for quicker responses and adopting shorter product life cycles in order to meet the rapid demands of the customers. Therefore, the changing customer demands are significantly managed with the help of a wiser approach named Just In Time (JIT) philosophy. JIT has completely transformed the economy of the globe by changing the face of manufacturing and has brought about a significant rise in profits (Shin, Ennis & Spurlin, 2015). It is both a philosophy and a set of methods and techniques for management utilized for the purpose of eliminating waste (particularly inventory). The report also throws light on the various attributes of a service.

Just In Time (JIT) can be defined as the manufacturing of the required items in the required amount at the required phase. In other words, JIT concept aims at the provision right product at the right place in right quantity at the right time. For the purpose of achieving the 4Rs, the necessity arises for a pull system of inventory. JIT focuses on the creation of more responsive logistics systems and reduction of levels of inventory thereby avoiding the surplus inventories. JIT can also be described as an inventory strategy which is employed by the companies in order to increase their overall efficiency and reduce inventory costs by decreasing the waste by the way of receiving goods only when their requirement arises in the process of production. It aims to address issues related to poor quality of products, delivery of incorrect part or quantity and high cycle times (Stevenson & Hojati, 2007).

The major goals of JIT involve arriving at the zero inventory level with the reduction in the setup costs for the achievement of smallest economical lot size. The goals also includes production of the items at the required rate of the customer, safety stocks minimization, implementation of a program related to total quality control, elimination of needless lead time and the optimization of the flow of materials from the suppliers till the point when the finished product is sold such that the inventories are optimized (Lou, et. al., 2015). 

The adoption of JIT concept provides advantages to the business in terms of reduction in work- in-progress and inventories along with the reduction in space occupied with the inventory. I

helps in the provision of improved services to the ultimate customer with improved quality as a result of greater involvement, motivation and participation of the employees in the processes. This ultimately leads to greater productivity and smoother work flows (Chiarini, 2017).

Major Shortcomings of the JIT Production Approach

For the implementation of an effective JIT, prerequisite arises of the establishment of a total quality control system along with the maintenance of good communications. There must be strong commitment of the management for the achievement of the set goals. For this purpose, the employees must also be encouraged for involvement along with the provision of requisite flexibility in operations. The most important requirement of JIT is the stability of demand and reliability of the vendor upon which the whole process depends. For this purpose, processing of low variety of items should be arranged at a time.

This production approach is also adopted by the Toyota in its manufacturing in order to become successful in the motor market around the globe. The production strategy adopted by Toyota is highlighted in the fact that the raw materials are received in the production floor only on the receipt of order or at the start of production process and not earlier. The parts are allowed at a node only when their requirement arises for the next node or when they are a part of an assembly for the next node. This philosophy has helped Toyota in keeping minimum amount of inventory required along with the minimization of costs. Toyota aims minimization of waste through just in time production by the way of attacking waste and achieving streamlined production through employee participation, continuous improvement and total quality control. This philosophy has allowed Toyota to adapt the changes in demand as quickly as possible without worrying regarding the disposing of expensive inventory. 

JIT often suffers from various shortcomings or limitations which in turn can have substantial bearing on the company in cases if they occur.

• Vulnerability- Due to the zero inventory system of JIT, it always faces the risk of changes in demand, plant shutdowns and various other uncertainties. Moreover, situations like sudden increase in the prices of the required materials due tonatural

disaster or shortage can result ultimately result in the incapacity of the company to effectively serve its customers.

• High Cost of Transportation- The delivery of the items only in need leads to the ordering of small and frequent lots which in turn causes delay lead to more delays due to highway congestion and ultimately can result in higher cost of
• Interruptions due to security- Manufacturers may face various interruptions due to the application of increased security in the JIT system and can therefore delay theshipments at the border 
• Lack of control over time frame- The delivery of goods to the ultimate customer of the manufacturer is significantly delayed due to the reliance of the manufacture on the timeliness of the supplier of materials for every order. This in turn can affect the reputation of the business in the minds of the ultimate
• Requirement of more planning- The sales variances and trends are better understood by the companies with the help of JIT inventory management. Moreover, the requirement of materials also varies at different times. Therefore, proper planning requirementarises for the inventory level in a way such that the suppliers are able to meet the requirement of different volumes at different times (Barlow, 2015).

Service can be defined as anything done for a client, the creation and delivery of which is a simultaneous process (Claessens, 2015). The four characteristics or attributes of a service involve intangibility, perishability, inseparability and variability. These attributes have been further explained below.

Unlike products which possess tangible attributes that are capable enough to provide relevant information to the customers in order to make comparison of the given product with other products, services cannot be touched, felt, sensed or tested before they are availed by the customer. In other words, services are intangible. Therefore, a service is often referred to as an abstract phenomenon which faces trouble in convincing customers while making the purchase 

Characteristics/ Attributes of a Service

Customers make the purchase decision regarding the services without adequate information. This difficulty is resolved with the help of introduction of physical evidence of the service (Weibenfels, 2014).

For example, while paying for a ticket online, a person does not have an idea regarding the quality of service. The promises made by the airline is relied upon by the person and that promise is intangible.

Services are considered extremely perishable which means that time plays an important role in the marketing of the services. In other words, if the use of the service is not made within time, it is lost forever as it cannot be stored for future sale or use. The proper management of the demand and supply can significantly help in overcoming this challenge. The development and use of a service is almost simultaneous process. The demands of the consumers are often increased due to the time constraint (Macintyre, Parry & Angelis, 2011).

For example, if all the seats of an airline is not sold in a particular flight, then the chance of collecting revenue from them and filling those seats is irreversibly and immediately gone.

Inseparability is another characteristic of a service. A service cannot be separated from the service providers. It means that it is inseparable from the service provider since the creation and consumption of services are simultaneous (Olufisayo, 2011). Unlike products which are taken away from the producers after production, the production of services is made at or near the point of purchase. This attribute of inseparability also results in increased expectations of the customers regarding the performance of the service and is sometimes often converted into disappointment in cases where those expectations are not met (Learn Marketing, 2017).

For example, a hotel room cannot be taken home for the purpose of consumption, therefore this service must be consumed at the point of provision. In the same way, for providing services, hairdresser needs to be present for the provision of services. 

Another characteristic of a service is variability. It means that the service is varied every time due to the changes in service provider, environment, location, time and manner, etc. The services provided by humans are more susceptible to variability in comparison with the services provided by the way of automation. The services provided by the service provider cannot be standardized or uniform. There always remain some differences in service since it is very difficult to make every service experience indistinguishable. However, systems and procedures are applied in order to make sure that consistency is obtained in services (Martin, 2007).

For example, the call rates vary from company to company in telecom industry. Some companies provides services at a higher rate and are expensive while some provides in reasonable rates.

Conclusion

The JIT concept proves to be an important concept for the purpose of reducing the costs related to production, bringing about efficiency in the contemporary business operations and the attainment of ultimate satisfaction of the customers (Wild, 2017). The report also provided details regarding four important characteristics/ attributes of service namely intangibility, perishability, inseparability and variability. A service cannot be seen or felt but still provides satisfaction to the receiver in the same way as provided by a product. 

References

Barlow, P. 2015. Just in Time (JIT) Advantages and Disadvantages, [Online]. Available at: https://babington.co.uk/blog/accounting/just-in-time-advantages-and-disadvantages/ [Accessed on: 4 January 2017].

Chiarini, A., 2017. An adaptation of the EOQ formula for JIT quasi-pull system production. Production Planning & Control, 28(2), pp.123-130.

Claessens, M. 2015. CHARACTERISTICS OF SERVICES: WHAT IS A SERVICE – AND WHAT

MAKES IT SO SPECIAL?, [Online]. Available at: https://marketing-insider.eu/characteristics-of- services/ [Accessed on: 4 January 2017].

Learn Marketing. 2017. Characteristics of a Service, [Online]. Available at: https://www.learnmarketing.net/mobile/characteristicsofaservicemobile.htm [Accessed on: 4 January 2017].

Lou, Y.I., Wang, H.C., Chen, J.C., Vatjanasaregagul, L. and Boger II, E.P., 2015. Merging Just- in-Time (JIT) Inventory Management with Electronic Data Interchange (EDI) Impacts on the Taiwan Electronic Industry. Open Journal of Accounting, 4(03), p.23.

Macintyre, M., Parry, G. and Angelis, J. 2011. Service Design and Delivery. Springer Science & Business Media.

Martin, M. M. 2007. Services Marketing: Focus on Service Characteristics to Create Competitive Advantage, [Online]. Available at: https://cascadebusnews.com/business- tips/marketing/176-services-marketing-focus-on-service-characteristics-to-create-competitive- advantage [Accessed on: 4 January 2017].

Olufisayo. 2011. Service Marketing: 5 Major Characteristics of Services, [Online]. Available at: https://www.entrepreneurshipsecret.com/5-major-characteristics-of-services/ [Accessed on: 4 January 2017].

Shin, S., Ennis, K.L. and Spurlin, W.P., 2015. Effect of inventory management efficiency on profitability: Current evidence from the US manufacturing industry. Journal of Economics and Economic Education Research, 16(1), p.98

Stevenson, W.J. and Hojati, M., 2007. Operations management (Vol. 8). Boston: McGraw- Hill/Irwin.

Weibenfels, C. 2014. A New Paradigm in Marketing – The Service Dominant Logic: Academia’s Reactions to the Theory of Vargo and Lusch. diplom.de.

Wild, T., 2017. Best practice in inventory management. Routledge.