Inventory with Harley Davidson Motor Company - Supply Chain Management

Internal Code: MAS6009

Supply Chain Management:

Questions: One of the most important problem in every organisation facing today, is at least one-third of company’s asset have to invest in inventory. The word “Inventory” can be defined as any goods that companies keep in stock (Smith, 1989). Generally, people will believe inventory is finished goods that waiting for selling. In contrast for a manufacturer, the inventory includes since raw material, Purchased and Supplies, Work in Progress (WIP), Items Being Transported, Tools and Equipment until final products at factories (III, 2011). Nowadays, every company around the world facing a challenge to reduce the cost of sell at the cheaper price than the other companies which sell at the low price but good quality. One of the biggest challenges is controlling inventory, generally in organisations will invest huge money in large inventories which it can change to sunk cost. Therefore, inventories control is important to decrease the cost to put in all material then organization have to know when to order and how much to order. One of technique which possible to organise to reduce inventories cost when an order is a different volume of order in every time is Just in time (JIT). Special qualification of JIT is control of production which happens in the time that company needed by a cut off the waste (Waters, 2007). It can mean JIT is inventory system which delivery things that necessary for production at the right time, right quality and right place base on customer orders. In this report will discuss the concept of JIT production system that effects to reduce inventory with use reference with successful JIT manufacturing company is Harley Davidson Motor Company. This report will begin with briefly of JIT history because JIT is not a new concept, different between push and pull system, Kanban systems to control pull process, the relationship between suppliers and buyers and advantage of JIT. After that, it will be followed by a description of company case which discusses how successful of JIT, what is company get after use JIT. In the final of this report will discuss and conclusion.