Manufacturing

In a manufacturing environment, in order to meet customers’ needs to maintain our competitive advantage ; market positioning, and also give an accurate and relatively certain forecast of our business, we use operations planning to calculate and schedule our medium ; long term production activities(aggregate planning) and short term production activities, such as detailed work plan for individuals and /or collective production resources, for instance, in manufacturing environment, machines, labour ,departments(operations scheduling. ) In manufacturing companies, the medium ; long term is usually static comparing to short term (more dynamic).

It is difficult to compensate short term mistakes, which may lose customers loyalties, lose market share. Internally speaking, it will make chaos in different departments and their plans will be re-scheduled. In order to avoid this, we need different information when giving operations planning for a batch production in the organisation. Cause production control can only act upon the information that it receives. (Muhlemann, 1992, production and operations planning), so more precise information we can get, more flexible and reliable we can schedule production.

In a manufacturing environment, short-term planning, which in essence establishes priorities with respect to some criterion measuring performance are quite crucial. The company is either machine limited or labour limited, Such information on labour as working time, labour efficiency and information on equipment (machines) as no. of them, their output and setting times are quite significant. The more accurate they are, the more flexibility we’re able to acquire. Particularly the shorter the term is, the more details we need with the aim of monitoring the process and coordinating among different factors.

On the other hand, we have to be ready at any time in case the customers’ requirements change, if this happens, the more information in our hand, the more reliable solution we will provide.

1. Customers may increase the quantities of goods, expected delivery timeless. Inside the company, time of maintenance of machines may alter, and we can’t assure raw material availability on hand 100%. At last, besides we can get the information from our customers and our departments. We should always observe the trend of the demand, and keep an eye on kinds of media-TV, radio and magazines (e. g.: The Economist and times) to do this, we’re able to know whether our company can meet the further demand and if it is working well currently, etc.
2. Interfaces between scheduling functions and other company areas: In one company, scheduling needs to cooperate with other functions, as marketing, costing and production function, all theses functions are inter-related. Scheduling function needs other functions providing information to plan, it need cost sheet from Costing Dep, department performance from Work Study Dep. On the contrary, other functions need the feedback from scheduling functions to carry on their activities.

Production function need the Gantt Chart to have an entire view about the progress of the manufacturing and find where may be monitored in case customers change their minds. Figure 1: Scheduling other functions produce, control ; monitor Manufacturing company Customer’s orders (from) In a way, they are integrated together and rely on each other. One can’t work without others as the base. If, say, an accident happens, the staff can’t work, which will be reported to the scheduling fuctionsfunctions by personnel fuctionfunction. Then some change havechange has to make to change the schedule.

We may give a shift if needed,etc.On the other hand, from the scheduling(Gantt Chart,etc), we may find some spared time between two activities. Then maybe marketing fuction can use the information to delivery the products in advance 1 As shown in Bradford Control Game 2 Competitors also provide some information that we apparently do not know, occasionally when the methods we get the information is old and inappropriate. Clark’s Restaurant is just on the High gate near school of managment, I worked there severl weeks once as both a waitress and kitchen assistant. 4 Usually the demand (customers) are roughly the same during the weekdays, but Saturdays is more busier.

VF Corporation is a strong and well-oiled manufacturing company. The success and growth of the company is attributed to their strategic acquisitions and upper management’s abilities to seize opportunities. VF Corporations has been around for 113 years. In those years this corporation has been aggressive and well informed about growth opportunities within the United States and abroad. VF has combined their driven culture, constant innovation and deep research insight to create products that will excite their consumers while creating brand loyalty.

The values of integrity, honesty, consideration and respect has helped craft VF’s approach to environmental sustainability to help the future generations create a healthier living environment. Millie and Brittany’s Paragraph: (add to this Millie) The history of VF Corporation is a rich and full of changes. The company originally started in 1899 as a mitten and reading glove manufacturer. There were six owners, including banker John Barbey.

In 1911 John Barbey bought out his five partners and set his sights on growing the company. He renamed the company Vanity Fair Silk Mills and included underwear in production. This turned the company into a lingerie powerhouse. In the 1950’s the company started to acquire other brands that would propel them into manufacturing history (Lambert). This started the expansion of VF Corporation. The company currently owns 25 brands and is looking to continue its growth into the Asia-pacific region.

In 2017 the company reports that this region will account for sixty percent of the revenue. The five year goal for the Asia Pacific is to reach two billion dollars in total revenue (VF Corporation-Press Release). The VF Corporation is confident that they will have the strategies and people to continue to grow so in 2004 they have launched a Growth Plan transforming VF into a global lifestyle apparel company. VF has identified six Growth Drivers that will help them succeed.

These six Growth drivers are:

• Transforming their portfolio with growing global lifestyle brands by investing in organic growth opportunities through acquisition.
• Going global by establishing platforms in Europe, Asia and Latin America.
• Serving the consumers directly by expanding their e-commerce capabilities.
• Lead in innovation “something new that creates” (VF Corporations – Growth Drivers)
• Enabling our future by investing in retail and supply chain capabilities that provide speed, flexibility and value.
• Win with winning customers by supporting customers’ vision.

VF is currently the fastest growing and biggest business in Outdoor & Action sports which accounts for half their global revenue. Their sporting brands continue to have tremendous opportunities for expansion in the new markets. VF’s Outdoor & Action Sports, Sportswear and Contemporary Brands are targeted to be more than 60% of total revenues by 2015. (VF Corporation-Our Strategy) With VF Corporations acquisitions, strong organic growth through their goals they have seen a steady growth over the past several years.

Chris and Brittany’s Paragraph: (Chris start this and add to intro) Everyone: (Why we recommend VF Corporation, a couple sentences) Buying VF Corporations stock would be advantageous to any investors. The numbers speak for themselves and the Wallstreetcheatsheet. com recommends investors to pay attention to this growing company. With VF Corporation’s diverse brands they have become a global leader in the apparel industry. Their Outdoor & Action Sports brands are continuing to grow with a record quarter in 2012, a total revenue rise of 14%.

APPC are used n aerospace, automotive, residential and infrastructure, marine, sport goods and mass transportation among others. Browse Full Report With TCO: http://www. Nonrepresentational. Bal/analyses-details/ trends-and-forecast-2013-2019 One of the major factors driving this market Is the growing aerospace market. APPC are consumed mainly In aerospace and marine applications which have been driving the market in past few years. APPC offer higher performance and lighter weight than other composites and hence, are preferred in aerospace.

APPC are used in glares, aircraft interiors and space applications. In addition, APPC are used In sporting goods such as golf shafts, skis, snowboards and others. However, the higher prices of the APPC can be a restraining factor for the growth of this market. On the basis of technology, advanced polymer composites the market Is divided Into prepares, resin Infusion. Poltroons and filament winding. Prepares Is the major used manufacturing technology for APPC. However, population and resin infusion process are likely to gain higher market share in near future.

North America is the leading region for the APPC market and is likely to grow in near future owing to huge emend from aerospace and military sector In this region. North America was followed by Europe where marine application is expected to gain more market. Asia Pacific is one of the fastest emerging markets for Caps owing to growing aerospace and marine industry. To Get Download Full Report with TCO: http://www. Nonrepresentational. Bal/ sample/TCO/1 94558 Some of the key players in the FRI. market are The Boeing Company, Hexed Corporation.

Cite Industries Inc. , Conklin]eke Ten Cater NV and TIP Composites among others. 1 OFF geographies, and current market trends. Geographies analyzed under this research port include North America Asia Pacific ; Europe Rest of the World This report provides comprehensive analysis of ; Market growth drivers ; Factors limiting market growth Current market trends Market structure ; Market projections for upcoming years This report is a complete study of current trends in the market, industry growth drivers, and restraints.

Kanthal, the largest of six divisions of Kanthal-Hoganas, specializes in the production and sales of electric resistance heating elements. Kanthal has over 10,000 customers and produces over 15,000 items. The company consists of three divisions. Kanthal Heating Technology, world leader, with 25% market share in supplying heating alloys. Kanthal Furnace Products, a dominant player, with 40% market share in supplying a wide range of heating elements for electric industrial furnaces. And, Kanthal Bimetals, one of the few companies in the world with fully integrated manufacturing capabilities of thermo-bimetals for temperature control devices.

Despite the company’s steady sales and performance, the President, Mr. Ridderstrale, felt that a new accounting system was needed to help Kanthal extract accurate information regarding its manufacturing cost structure and the cost of supplying individual customers. The primary motivation behind developing a new system was driven by the company’s strategy to achieve higher growth and profitability without having to acquire additional sales and administration (S&A) resources to handle the growth in volume.

Mr. Ridderstrale wanted to achieve profitability by division, product line, market and customer. He believed that there was an opportunity to increase the bottom line by redeploying current resources to increase profits such that return on capital in excess of 20% was maintained. With access to detailed cost information Mr. Ridderstrale hoped to reallocate the company’s resources to customers with hidden profits and reduce efforts for customers with hidden losses.

Given Kanthal’s current accounting system, it is clear to understand why Mr. Ridderstrale recognized the opportunity to increase bottom line profits without acquiring additional resources. A more accurate and proportionate allocation of overhead costs would help company determine which customers were profitable and which were not. His goals are reasonable and sensible, assuming that the new system will accurately capture profits/losses per customer and product order. The major obstacle in achieving this goal would be to get his employees to recognize the importance of a new costing system and to subsequently accept responsibility for promoting high-margin products to high-profit customers instead of focusing on just top line growth targets.

Previous System

Kanthal’s previous costing system was inefficient in allocating resource costs to products and customers in the proportions they were being consumed. The indirect costs were either manufacturing costs that were allocated to products based on direct labour, or S;A costs which were treated as period expenses and allocated to a particular order on a fixed percentage of total revenues basis. Other costs such as materials, wages, and variable and fixed processing were also allocated based on a fixed percentage of sales.

It was clear that the old system did not have the sophistication to measure the profitability of individual customers or the real cost of an order. Thus more emphasis was placed on volume of sales rather than on order profitability. As a result, all products for which the price was higher than the sum of all costs appeared profitable. Furthermore, since the S;A expenses were left unanalyzed and most costs were based on percentage of sales allocations, the real cost of an order for a given customer was not properly captured. These methods of cost treatment lead to the merging of costs and revenues across all orders and sales, despite their profitability or unpredictability.

Appendix ‘A’ shows that under the old system, two products- one stocked (customer #33514 – case exhibit 7) and another non-stocked (customer #33528 – case exhibit 7) – appeared to be equally profitable at 7.5% profit margin. Under the new system, it becomes clear that customer #33514 is actually much more profitable and that overall profitability is being driven down by customer #33528. Further analysis of these two orders reveals the significant hidden costs and profits. As illustrated in Appendix ‘A’, orders that required non-stock inventory lead to higher overall costs which often made an order unprofitable. Under the old system these additional costs associated with non-stocked inventory, were being diluted in ‘total’ reported figures.

For Kanthal to achieve its new strategy of higher growth and profitability without having to acquire additional S;A resources, changes to the current system were necessary. The management team required a system that would enable them to not only identify profitable versus unprofitable orders, but to also enable them to prioritize and allocate the company’s scare resources based on customer profitability.

This report explores and explains the behaviour of the employees at Oticon, a hearing aid manufacturing company. Using relevant theories, this report also discusses about the consistency of the approach taken by the company for restructuring and the key issues faced by the organisation due to employee behaviour and the impact of the behaviour on the organisation. Oticon, a subsidiary of William Demant Holding group, is the second largest hearing aid manufacturing company in the world.

The company was founded in 1904 and is situated in Denmark, with its production plant in Scotland. The company’s Danish subsidiaries are in Coppenhagen, Hellerup, Thisted and Snekkersten. The company is widely spread in Europe as well, with its subsidiaries in Norway, France, Holland, Germany, Spain and Switzerland. Outside Europe, the company has its presence in US and Japan as well. The majority of the shares are held by Oticon Trust Fund and that accounts to 75 percent.

Lars Kolind, the current managing director holds more than 5 percent of the stock. The company is popularly known as ‘Spaghetti Organisation’, for its poor management style. During late 1970’s Oticon, including its other Danish hearing aid manufacturers, accounted for approximately 25 percent of the market share in hear aid manufacturing market. There was competition from other Danish hearing aid manufacturers like Wild ex and Danavox. The traditional model, ‘under the ear’, was the success of many European hear aid producers at that time.

The dominance of the Danish manufacturers in United States slowed down due to the entry of ‘in the ear’ hearing aid and grabbed 80 percent of the United states sales by 1983. This dragged Oticon into serious financial problems in 1987. The management followed a status quo approach in managing the company, and they emphasised greatly on shareholders differences of opinion. The company structure with three functional areas lacked interaction. ‘The most appropriate structure is dependent, therefore, upon the contingencies of the situation for each individual organisation’.

This is familiar from the Oticon point of view, as the reasons are lack of innovation, ineffective management, complacency and the emergence of innovative competitors. The company understood that the structure to be framed should be more efficient in terms of management, motivation and production. In 1991, Mr. Lars Kolind had replaced the hierarchical structure to project based structure. This will enable each and every employee to get engaged into a project and work in teams. The employee was made to work in more than one project at the same time.

According to Mullins  Matrix Organisation structure is a combination of functional departments, which contains permanent staff and can exercise greater line of control, and units that unite various activities of different functional areas in a project, geography or programme. This structure is useful when there is a necessity to process information and necessity to share resources. Oticon has adopted a similar kind of structure where an individual employee has to work in different projects under a project manager.

In general, every organisation, large or small; local, national or multinational; private or public has a structure. There is always a need for the people to know who is in charge of the business and the person responsible in dealing with critical circumstances. This can be achieved through structure. Different firms will be structured in different forms based on their size, culture, history and activities. A large multinational company may have one person as the head of a particular region, whereas a different person as the head of the other region. But the head of the organisation may be different.

A democratic organisation tends to have a flat structure whereas an autocratic business tends to have a taller structure. The structure of the company also depends on the nature of the business. There is a need to have a flatter structure in the organisation as it motivates people, who are treated equal, to come up with their ideas. Mintzberg and Bedeian (1980) argues that there is a need to discuss if the traditional hierarchical structures are relevant in modern business. As successful organisations’ grow, they tend to employ more people to meet their extra work.

These resources may not be play a pivotal role in the long run and as a result of this, the company reviews its structure. Hierarchical structures contains long chains of commands which causes poor communication and poor coordination, which left unchecked will cause diseconomies of scale Senior (2002, pp. 586) states that matrix organisation relies heavily on teamwork, with managers requiring high-level human management and behavioural skills. Oticon was moved to Hellerup and the new structure was implemented on 8 Aug 1991.

The new structure implemented, has had a significant impact on all aspects of the organisation. The usual and well known habits and routines were changed. However, there was some resistance to the change from the employees. Oticon tried to minimise the resistance by keeping the employees updated about what was going to happen in the next three years. The managers informed its employees about the new policies adopted and openly discussed about the benefits, and the reasons for implementing the change. Many employees had actively participated in planning of the company.

The company mandated all its employees to use a personal computer (PC) and they were encouraged to carry their PCs to their home such that they could gain some expertise. The attrition rate in the company had slowed down in the initial three months of implementing the change. There is some kind of resistance from the employees of Oticon with the implementation of new change. This resistance may be because of lack of trust in the management or their personal opinion on change or misunderstanding created because of miscommunication about the change.

Though, this concept seems to be a totally new experience, there were some employees who were not comfortable with the change implemented. Mullins suggests a framework to managers, so that they can understand what changes the organisation is capable of handling, and he identified three factors that had a significant effect on organisational responses to change. Generally the change in an organisation is led by the front line staff where as the senior managers play the role of facilitators in organisational transformation. Managerial behaviour plays a pivotal role in the implementation of the change.

Some employees may respond positively, or show interest to the change. But there are concerns where the employees are mandated to participate even if the employee is not willing to cope with the change. This may lead to further frustration and insecurity in the employee. To solve this, a manager needs to analyse the effect of change on each employee and take special care in dealing with the dis-satisfied employees. He should try to explain the potential benefits in implementing the change before the dissatisfaction in one employee might spread to the other employee.

Industry

• increased demand for water and water treatment, trend expected to continue
• market projections reaching $348 billion
• demand growing for safe drinking water in developing countries
• sustainability challenges and advancements in environmental regulation result in growth of demand for higher water treatment standards
• 2008, 1. billion without drinking water, 2. 4 billion not connected to wastewater systems
• 40% projected increase in water consumption by 2025, 1/3 of world population affected by water shortage
• in Canada, more than $2 billion in sales
• largest consumers – municipalities, both products and services
• significant portion of market – industrial

Competition

• dominated by 2 large mutli-national companies ( Siemens water tech and Zenon membrane solutions)
• competition targeted large users of filtration systems (corporation and municipalities) requiring over 1 million litres/day
• Siemens – 2. million in revenue, 6000 employees (150 R&D), serve more than 90% of fortune 500 manufacturing companies, around 100,000 industrial consumers, parent company Siemens AG over 100 billion electronics and engineering company in over 190 countries with 428,000 people, leader in innovation
• Zenon – owned by GE, provided a complete range of filtration processes, offered broadest product line in industry, over 100 years of experience, over 300,000 employees in over 100 countries, publically traded with 18 million in revenue
• smaller competitors, specialize in niche market, offer sales and support on a specific type of filtration and treatment product

Environment

• have to meet provincial regulations based on standards set by federal legislation
• some environmental legislation required wastewater treatment
• discharge limits for sewer use, storm sewers, and groundwater seepage; limits vary regionally
• wastewater dumped for use of a fertilizer must be treated
• stricter legislation raising environmental standards required by companies
• many companies require certificate of approval from ministry of environment and energy, validating compliance with all guidelines

Filter Innovations Inc

Dragasevich studied marine biology, worked for major supplier of filter presses in NA  extensive experience in industrial process and environmental products, sales manager with GAF (industry leader for filter vessels and bag filters) 1992, founded Filter Innovations.

Company

small industrial water filtration company identifies and supplies treatment solutions for groundwater, wastewater, process water and air  evaluated client`s needs and design appropriate system to meet need, develop and build system, install it, monitor it regularly, offer product support  supplies wide range of environmental products to support filtration systems  goal – prioritize social and environmental responsibilities at all times to ensure that actions positively influence both the community and environment ongoing R&D development of new technologies for new products and systems; important to be recognized as being at forefront of the leading technology employs 14 people, sales representatives, technology engineers & technicians, administrative staff alliance with firms acting as distributors of its products and systems across NA with few sales in Europe and SA serves 500 clients, FII equipment operational in over 1500 business sites; 80% sales in Canada, 15% sales in US, 5% sales outside of NA  wants to be recognized as primary supplier of environmental equipment and products, offers simple, innovative solutions for air and water treatment; wants to be one-stop shop for all filtration needs, offering timely and cost-effective solutions.

Calco Group

2006, FII purchased by CEG (identifies and acquires environmental companies that were leading suppliers of its specific products) membership with Calco allowed companies to share resources, networks, and knowledge MLE (groundwater remediation) offers similar products as FII; MLE benefit from sales expertise; FII able to capitalize on MLE strong manufacturing focus Operations: high focus on sales/technical knowledge; high customer-centric outlook; flexibility in meeting needs of customer key to success; unique/comprehensive business structure (engineering, manufacturing, and distributing of various filtration products and systems commodity products in inventory for quick sale (filter media, off-the-shelf filtration units), other products ordered from suppliers as needed (keep inventory investments and storage costs low) advantageous membership with CEG and strong supplier networks customized systems – engage in collaborative design efforts with clients and engineers; once designed, system built by manufacturing alliances then installed and supported by FII offers rental and leasing option; three types interested in this – those who want to test a system before purchase, those who need it for a specific time period only, and those who want to finance system through regular instalment payments

Sales

• about 65% of revenues from sale of individual products; customized products represent 35% of sales

Consumers

• 2 reason for demand – companies pollute above regulated level obligated to avoid environmental penalties; companies recognize opportunity to save money by cleaning/recycling wastewater by reducing disposal costs; demand ranges from short-term, quick-fix to long-term consultation/installation (ongoing monitoring and support) tend to focus on projects requiring less that 1 million litres/day; able to provide personalized support; larger companies don’t find these projects profitable, less competition customers in 2 equal groups – environmental consulting companies/distributors on behalf of their clients; end users (buy direct from FII)

Environmental consultants

analyse clients’ wastewater treatment needs, recommend solution and help implement it; after assessing need, issue request for RFP from each vendor, use industry expertise to recommend best option for client

End user

no internal capability, FII identify needs, build custom solution to fix problem (incorporating restrictions); if commodity products much more price sensitive choose vendor with lowest price, for custom products price less of a concern and willing to pay; learn through tradeshows, advertising, word-of-mouth, and industry reputation MBR: new, stricter government regulations meant that company’s existing wastewater treatment designs did not meet new guidelines; faced with decision of whether to expand into MBR market MBR – new technology for wastewater treatment, allow for water re-use; different application than FII  MBR designed to treat biological wastewater, predict that MBR system will be used to add reverse osmosis to make water safe for portable water consumption Europe leading in development currently best environmental option; FII would benefit from MBR sales and advanced knowhow/expertise with respect to manufacturing, engineering, building, and supporting new systems

Ford Motor Company is a firm in the motor parts and assembling industry. It has been incorporated more than 150 years back. The company s one of the pioneers to adopt the Just in Time system of stock controls. This system is still applicable by the company to date though with ne developments being incorporated into it to enhance the applicability. (Ford, 2009) Just in time stock control is a very unique system of stock control. It gets company into action if only it’s needed to. It works in a strategy aimed at reducing wastage of resources such as time and costs of holding stock.

The most significant point about this method is that no stocks, whether of raw materials of finished good are kept, hence minimized costs of holding stock, maintenance of warehouses, and depreciation of finished goods in display or warehouses. (Bragg S. M. , 2004) Objectives of adopting such a system as seen individually include optimizing each step of the manufacturing system. This is basically seen as a measure to get “the most from the least”. Discouraging of huge lag times and idle times is the way towards the achievement.

Ta every step of manufacturing, the equipment used, personnel and other resources, including time are utilized to their best. Reduction of flaws in products is another objective, deformation in products and their parts will be reduced if exactly what is wanted is prepared and appears as is described. Process of storage or warehousing of finished products normally increases the chances of flaws being experienced. This is also the case when the raw materials are acquired and stored before their usage. Ford also was trying to lower the manufacturing cost through adoption of JIT method.

The achievement of this is through the reduction of employees. When there is no job to be worked on, lower costs incurred on shipment of raw materials which might not be necessary, the need to restructure some already finished parts to meet the consumers’ requirement and he need to maintain the only needed equipment by disposing the un-utilized ones. (Crowson, 2005) The other objective of Ford is to make the product demanded by customers. This has some advantages in that the product that has to be mad already has its demand placed and therefore no money will be lost through displays and may be promotion of the same.

The product also will be made in accordance to what the customer needs, hence chances of restructuring of the product to suit the market are very low if not non-existent Incorporation of flexibility in the system was also an objective targeted by the Ford Co. JIT system is highly known to be open for modification especially technologically as opposed to other systems. Ford has over the years found it easier to upgrade technological development as opposed to before. Building a strong and reliable relationship between the customers and the suppliers is another objective facing the Ford.

Just in Time system is never a one man affair, and this calls for a big proportion of reliance being placed at the input level of the system- which is the suppliers, and the end level of the process which represents the consumer. Bridging of that gap between the suppliers and the consumer had been the company’s objective too. v. Extent of Achievement of the Objectives by the company Ford Corporation, despite the challenges, may be seen to have achieved the objectives it targeted over the JIT application.

Towards the achievement of optimizing each steps of manufacturing process, Ford has reported positive results. Thy have reported that the manufacturing capacities of each process are utilized up to a high of 82% annually, unlike the previous capacities which translated to only 41% utilization leaving the 59% difference to waste. Ford has also realized an increase in contribution per asset utilized. This is explained by the ability of the firm to invest in only the assets they need, and subsequent utility of the assets as profitably as has been witnessed.

(psabilla, 2007) Since the adoption of JIT system, and with later developments and improvements in the system, the company has been able to make up to 100% flaw-free motor vehicles. The defects have also been at e very negligible level. Their market survey and customer feedbacks reports have been very positive on the achievement of the objective to reduce the flaws in the products. The manufacturing costs too have been highly minimized due to elimination of spending unnecessarily on activities such as warehousing and bulk shipment of uncalled for raw materials.

From inception of JIT system, the firm has been encouraging their customers, which include big multinationals, governments, and individuals, to make an order of their products well in advance, and include some of the specification variables such as seat specification (e. g. leather or fabric), both material, color, EFI system etc. They have so far witnessed positive response and have instead strengthened their research and development department, rather than that of advertising for goods already in go downs.

This has as well helped them successfully bridge the gap between supplier and consumers, by ensuring that time between the ordering of raw materials from the supplier to the time of dispatching the order to the consumer, is well utilized and well coordinated to ensure consistency. Application of IT in the JIT system has been enhanced by the firm. This is because inception of information technology in materials management process is crucial to effectiveness of JIT production and delivery system, and supply chain management.

Ford has installed the Electronic Data Interchange system and has then interfaced to combat with the JIT system to ensure smooth run in acquisition of raw parts, actual production and the delivery of the finished products. Suggestions to improve the system JIT system is highly dependent on supplier efficiency and correspondence. The supplier is where the actual process starts after the order is placed. This is to mean that any delay or frustration of supplier’s efforts will be highly effective negatively to the firm.

This was witnessed in1996 where the firm was forced to close down about six of its production plants due to lack of proper supplies coordination. This cost the company millions of dollars in profits lost due to the running costs of running some of the activities of the closed down production plants and yet they were unproductive at the moment. To curb this issue the firm might be forced to be in very close liaison with very reliable suppliers. This might call for necessity to have control over such suppliers to strengthen the possibility of placing due reliance to them, as and when an order needs to be worked on.

It also requires a very highly well assembled procurement division. The division should be proactive, up to date and highly linked to hasten the requisition procedure. Another suggestion which could improve the performance of the system is the merger of orders strategy. His is whereby the orders are cumulated and worked on within some predetermined time length. For instance, the company can design its timetable such that orders received and accepted are worked on within a period of say two months. This will apply for those orders which have a similar process of manufacturing.

Such a system will help to reduce some stock related costs in that if several products will be manufactured, starting from a similar time, requisition of their raw parts will be in bulk hence such privileges as quantity discounts may be enjoyed which ends up reducing the ordering costs. His will also further facilitate the utilization of resources such as staff and equipment, which in most cases are hired on short term contractual basis. This will make the control system enjoy such provisions as those ones in the Economic Order Quantity (EOQ) system which considers buying in bulk to gain discounts.

(Lucey, 2002) The dispatch of the final product should also be made to appear as cheaper and shorter s is possible. Mot of the consignments are distributed through the sea, a means which is slower an hence consumes money which is expensive in that the cost met by the company such as insurance in transit and on-board maintenance will increase as time goes by. Comparatively, it might be cheaper to airlift much finished products to their destinations. This ends up saving even up to 10% of the whole process cost incurred to the point of customers’ hands. References; Bragg, S.

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223-241). River Street: ohn Wiley and Sons. Ford. (2009, April 14th). company information. Retrieved May 2nd, 2009, from Ford Corporation Website: http://www. ford. com/about-ford/company-information Hicks, D. T. (2002). Activity Based Costing-ed. 2. In D. T. Hicks, ctivity Based Costing-ed. 2 (pp. 3-5). River Street: John Wiley an Sons. Lucey, T. (2002). Quantitative Techniques Ed. 6. In T. Lucey, Quantitative Techniques Ed. 6 (pp. 232-260). London: Bookpower. Pizzey, A. (1989). Cost and Management Accounting-An introducion for students,Ed. 3. In A.

Pizzey, Cost and Management Accounting-An introducion for students,Ed. 3 (p. 126). SAGE: New York. psabilla. (2007, March 23). Ford’s Contribution to Just-In-Time. Retrieved May 2nd, 2009, from Shmula: http://www. shmula. com/371/fords-contribution-to-just-in-time W. N. Funnel, R. W. (1996). Butterworths Acconuting Companions-process costing. In R. W. W. N. Funnel, Butterworths Acconuting Companions-process costing (p. 82). London: LEXIS Publishing. Yu-Lee, R. T. (2001). Explicit Cost Dynamics. In R. T. Yu-Lee, Explicit Cost Dynamics (pp. 2-4). River Street: John Wiley and Sons.