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    INDE7390 Case14

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    chuczy
    The Kanban system described in the case study provides advantages to The Smith Group by allowing them to manage inventory levels at the distributor without needing electronic data exchange. The card system implies inventory is managed at a base-stock level, as it provides data on customer demand that can be used for production and delivery planning. This allows The Smith Group to switch to a make-to-order environment where production is based on demand signals from the card system. Potential risks of the Kanban system include inventory falling below reorder points if lead times increase, sudden changes in customer demand, and forecasting variations. If the system reduces distributor inventory, the distributor can use the extra space for other purposes and improve their service level.

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    INDE7390 Case14

    Uploaded by

    chuczy
    365 views2 pages
    The Kanban system described in the case study provides advantages to The Smith Group by allowing them to manage inventory levels at the distributor without needing electronic data exchange. The card system implies inventory is managed at a base-stock level, as it provides data on customer demand that can be used for production and delivery planning. This allows The Smith Group to switch to a make-to-order environment where production is based on demand signals from the card system. Potential risks of the Kanban system include inventory falling below reorder points if lead times increase, sudden changes in customer demand, and forecasting variations. If the system reduces distributor inventory, the distributor can use the extra space for other purposes and improve their service level.

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    INDE7390-Case14

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    The Kanban system described in the case study provides advantages to The Smith Group by allowing them to manage inventory levels at the distributor without needing electronic data exchange. The card system implies inventory is managed at a base-stock level, as it provides data on customer demand that can be used for production and delivery planning. This allows The Smith Group to switch to a make-to-order environment where production is based on demand signals from the card system. Potential risks of the Kanban system include inventory falling below reorder points if lead times increase, sudden changes in customer demand, and forecasting variations. If the system reduces distributor inventory, the distributor can use the extra space for other purposes and improve their service level.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    365 views2 pages

    INDE7390 Case14

    Uploaded by

    chuczy
    The Kanban system described in the case study provides advantages to The Smith Group by allowing them to manage inventory levels at the distributor without needing electronic data exchange. The card system implies inventory is managed at a base-stock level, as it provides data on customer demand that can be used for production and delivery planning. This allows The Smith Group to switch to a make-to-order environment where production is based on demand signals from the card system. Potential risks of the Kanban system include inventory falling below reorder points if lead times increase, sudden changes in customer demand, and forecasting variations. If the system reduces distributor inventory, the distributor can use the extra space for other purposes and improve their service level.

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    Case Study 14

    1. What is the advantage to the Smith Group of implementing the Kanban


    System described in the case?
    Ans: Kanban framework is the shrewd method for executing the
    methodology like VMI technique without the need of electronic
    information exchange. The favorable circumstances of the Kanban
    framework as depicted for the situation study are as per the following:
    a)
    System gives Smith continuous data about client request without
    the need of EDI.
    b)
    A watchful investigation of the card framework utilized
    by the Smith Group recommend that its successfully oversees stock at
    wholesaler level.
    2. Explain how the card system implies that inventory is managed on a basestock
    Level.
    Ans: The generation in the Kanban framework will be activated by the
    interest through the utilization of cards. At the point when conveyance truck
    lands at wholesaler's office they gather all cards that are isolates from the
    thing sold by the wholesalers. This gives data about the client request that
    can be utilized as a part of the generation and conveyance arranging.
    Henceforth, target stock can be controlled by the organization, the base
    stock level, and every audit period , the stock position is evaluated and the
    distribution center requests enough to raise the stock position to the base
    stock level.
    3. How might the system allow The Smith Group to switch to a make-to-order
    environment?
    Ans: The Kanban framework takes after the Make to request methodology. As
    expressed for the situation study, when conveyance truck touches base at
    merchant's office they gather all cards that are withdrawn from the thing
    sold by the wholesalers. This gives data about the client request that can be
    utilized as a part of the generation and appropriation arranging. This is a
    Make-To-Order approach, subsequent to the creation is done in the wake of
    gathering the information from the card framework and the key idea utilized
    behind this is Pull Strategy. Subsequently, the Smith gathering can change to
    Make-To-Order.
    4. What is the risk of Kanban system for The Smith Group?

    Ans: a)
    lead time

    inventory may fall beneath reorder indicate due the increment in

    b)

    sudden change in client request

    c)

    Forecasting may fluctuate.

    5. If the Kanban system is going to allow The Smith Group to reduce the
    inventory, what is the impact on the distributor? What are the distributors
    going to do with the extra space?
    Ans: The impact of Kanban framework on the wholesaler is profited. Since
    supplier needs to deal with its own particular stock, it will be more worried
    about overseeing it adequately. Henceforth, this will diminish the shots of
    Stock out for the wholesaler and subsequently the Service level can be
    enhanced b the merchant.

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