Just in Time (JIT) Analysis

Just in Time (JIT) is a philosophy that defines how a business develops its supply chain strategies. A company’s JIT philosophy influences its relationships with its suppliers, customers, and employees. In its simplest form, JIT means getting the right amount of goods in the right place at the right time (Reid and Sanders, 2016). It aims to maximize production volume while minimizing waste and maintaining continuous improvement. Zara employs various strategies that contribute to its JIT philosophy. This paper aims to perform a JIT analysis and an evaluation of the Zara supply chain management.

Zara’s Use of JIT

Zara’s operations are managed in a lean production system based on the concepts of the JIT philosophy. The company has developed a controlled and integrated operations process that enables them to minimize waste in the production process. The company’s main focus in its production is on the teams that do the actual production and quality management. The company designs and produces all its products internally. The design is done based on customer preferences and trends at a given time. Hence, the design and production process involves team effort with the designers, market specialists, procurement, and production teams. It uses several strategies in the manufacturing process to ensure that the products are delivered to the customers just in time.

First, the company integrates the entire supply chain with the help of information technology. The communication and internet systems, such as the company’s website and the internal information systems for the employees, ensure that all the important stakeholders are connected. Through these systems, the company collects information on the customers. They check data on the sales trends and fashion trends required at a given time. With this information, the company is able to ascertain the types of products that are being demanded in the market and estimate the quantities they will be able to sell. As a result, the company is able to produce the right quantities of clothing on average to minimize wastage through surplus production. The market data also enables them to produce the type of quality that is demanded in the market. Zara also minimizes waste and ensures the utmost quality by having a specific production process. The production process uses the same processes to ensure that there is minimal development of product defects. With minimal defective products, the company is able to maintain quality at a maximum level while minimizing wastage.

Supply Chain Management

Zara has also developed some supply chain management strategies that aim at supporting its JIT production philosophy. Supply chain management is a vital business function that coordinates all the activities that take place in the supply chain (Christopher, 2016). Supply chain management activities coordinate the movement of goods from the suppliers to the manufacturers, then to the distributors and the consumers.

The first step of the Zara supply chain is sourcing raw materials. The main raw materials for the company are the fabrics used for making fashion designs. Zara sources for its suppliers strategically to ensure that it acquires the best quality but cost-effective fabrics. To achieve this, the company has external suppliers. With external suppliers, Zara is able to evaluate a wide variety of options to choose the best possible quality. When it comes to production, the company has set up its own manufacturing plants. Zara has thousands of manufacturing plants located in various parts of the world. However, these plants are mainly located in regions where labor costs are minimized to reduce production costs. The many manufacturing plants allow the company to meet the high demand for a new production every few months when a new fashion season emerges. In every season, the company frees up to 80% of its production plants to facilitate the production of the new fashion. For distribution, the company has formed supply chain relationships with distributors who ensure the products are delivered to tens of thousands of stores in time. Lastly, Zara uses various strategies to retail its products to customers. The three min retailing strategies that the company uses include franchising, its own retail stores, and e-commerce. Zara offers franchise opportunities for businesspeople wanting to operate its business model. It also has its own retail stores that the company fully owns. Most importantly, the company has embraced the recent development of online businesses. Zara has online stores where buyers from almost all countries can purchase the products.

Conclusion

Effective management of the supply chain is essential for a business’s success. A business must be able to ensure the smooth movement of products from the suppliers to the customers. Zara uses a JIT philosophy to ensure that the right supplies are available to consumers in time. The company minimizes waste and maintains the best possible quality at a given time.

References

Christopher, M. (2016). Logistics & supply chain management. Pearson UK.

Reid, R. D., & Sanders, N. R. (2016). Operations Management, Binder Ready Version: An Integrated Approach. John Wiley & Sons.

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[u05a2] Unit 5 Assignment 2 Project – Just in Time JIT Analysis

Part four of your course project focuses on the analysis of your selected company’s use of JIT, and supply chain management.

Just in Time JIT Analysis

For more information on JIT and Supply Chain Management, refer to Chapters 4 and 7 in your textbook. Your submission should be approximately three pages, and should be submitted as an attachment to this assignment.

Resources

Project – JIT Analysis Scoring Guide

Due Date: Unit 5
Percentage of Course Grade: 5%.