Unit R014 - Engineering Manufacture - Topic Area 4 - Retrieval A

Inventory Management

JIT is an abbreviation for what?

• Just in transit

• Just in time

• Jaw internal thread

• Just inside truck

Inventory Management

JIT is?

• Getting to work just in time.

• Delivering the product to the customer just in time.

• Ordering stock so it arrives just in time for when you need it in the production process.

• Meeting the production deadlines just in time.

Inventory Management

JIT eliminates overordering and therefore helps to reduce​ (a)   . Over-ordering of stock that is not used can lead to ​ ​ (b)   components that cannot be used. JIT can significantly improve ​ (c)   as high levels of stock require a lot of management such as staff, storage space, security and heating/lighting. Lower levels of ​ (d)   and capital are needed for stock as less money is tied up in stock, this can lead to money bein available for other business needs such as expansion or new machinery.

• waste
• obsolete
• efficiency
• investment

Inventory Management

Select the disadvantages of using a JIT stock management system.

• Heavily dependent on the supply chain.

• Unexpected orders can be difficult to meet as there is no finished stock to hand.

• Stock is often sourced locally in order to benefit from quick deliveries however this may not always be the most cost effective option.

• Uncontrollable acts of nature can result in missed deliveries and a halt to production.

Answer explanation

Toyota are a huge player in the use of JIT stock control. A few years ago there was a problem with one of the cargo ships that was delivering stock and machinery to a UK factory.

The cargo ship was unable to make the delivery because of weather conditions.

This led to a huge hold up in production as the production facility physically had no stock to manufacture.

Inventory Management

MRP is an abbreviation for a business process used in the control of inventory and stock. What does it stand for?

• Machinery, Resources and Products

• Material Requirements Planning

• Model Requisition Process

• Movement, Rooming and Production

Answer explanation

MRP is a business model that ensures the right amount of stock/inventory/resources is available for the forecasted demand and needs of the business.

MRP requires and uses lots of data to ensure that material or inventory is ordered efficiently and effectively.

MRP will consider the customer orders that already exist, the forecasted future orders, current stock levels, the BOM's (bill of materials) for the products being made.

From this purchase orders can be raised with suppliers to ensure stock arrives on time for production and works orders can be raised so the production staff can plan manufacturing activities.

Inventory Management

Material requirements planning requires a very close understanding of the relationship between..............?

• Managers and CEO's

• Machinery and Hazards

• Supply and Demand

Answer explanation

Supply and demand is a fundamental element of successful implementation of MRP.

Supply needs to match demand in order to allow money to not be tied up in stock.

Also if demand is too high for the stock levels available this can lead to customers having excessive delivery times or, worse case scenario, being unable to place orders which will potentially lead to lost business as the customer will go elsewhere.

Inventory Management

MRP (Materials Requirements Planning) needs to use the information from BOM's to help. What is a BOM?

• Bill of Materials

• Business only mode

• British Original Manufacturing

• Build, Order, Measure

Answer explanation

If you have ever completed a large Lego kit or a piece of flat pack furniture then a BOM is similar to the list of components that are given at the start of a set of instructions.

A BOM (Bill of Materials) is a list of all the materials and components required for manufacture. Sometimes it will include the drawings and production documents required also for a product.

Inventory Management

MRP has a host of advantages however there are potential drawbacks too. MRP uses a huge amount of ​ (a)   . The main software used to manage all the data usually has a high ​ (b)   cost. MRP is also heavily reliant on ​ (c)   and the data used needs to be as ​ (d)   as possible.

• resources
• subscription
• forecasting
• accurate