Just in Time Approach in Inventory Management

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2 INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2 ICBER 2011) PROCEEDING

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JUST IN TIME APPROACH IN INVENTORY MANAGEMENT
Abdul Talib Bon (Corresponding author) Faculty of Technology Management, Business and Entrepreneurship Universiti Tun Hussein Onn Malaysia, 86400 Batu Pahat, Johor, Malaysia Tel: +60127665756 E-mail: talibon@gmail.com Anny Garai Faculty of Technology Management, Business and Entrepreneurship Universiti Tun Hussein Onn Malaysia, 86400 Batu Pahat, Johor, Malaysia Tel: +60137016298 E-mail: anniegarai_87@yahoo.com.my Abstract Quality improvement and costs control are vital to organizations for work performance enhancement and fulfilling customers’ requirement. Inventories that are stored in large amount of quantities will result in waste and space usage. One effective solution is using Just in Time (JIT) concept as a method to reduce costs, improve quality and meet the ever-changing customer needs. The adoption of Just in Time (JIT) concepts seems to be the most effective way to overcome these circumstances. JIT is management philosophy that emphasizes on eliminating waste and increase productivity. The main purpose of this research is to find out whether the implementation of JIT would reduce the inventories at Electronics component industry especially at the parts producing stamping of FCM. This research is done by case study. Therefore the data collection would be using secondary data which is the documentation from FCM itself and also via observation. The data were analyzed by doing the comparison before and after the implementation of JIT using Microsoft words excel. From the analysis that had been done, the implementation of JIT had increased the inventories management at the stamping parts production. As the conclusion, the implementation of JIT in the inventory management at the parts production stamping at Electronics component industry had successfully reduce the inventories level while improving the inventory level. Keywords: Stamping Production, Just in Time, inventory management, electronics component industry.

1. Introduction Globalisation phenomena had created the business without boundaries. Most of the organisation nowadays only focuses in two main elements that can influence the global market, which is customer satisfaction and also the product and services quality. Organisation all around the world need to take the initiative to increase the product quality to satisfy the needs and customer demand that always change besides minimizing the production cost. This initiative is needed to keep the challenge at the market (Canel, et al., 2000). One of the most effective solutions is with the application of Just in Time (JIT). Application of JIT could involve few important elements at organisation such as production level, marketing level, engineering level and purchasing level. The application of JIT more focuses on management process. Therefore, JIT can be applied at varying process. (Canel, et al., 2000). JIT is the concept of management that invented specially to avoid waste. This is in order to minimize the waste and increase the productivity (Zhu and Meredith, 1995). JIT is one type of Lean Manufacturing (Yen, 2003). Lean manufacturing is the process to control the production which depends on the demand by the customers. It is also act to reduce waste. The application of Lean Manufacturing can reduce the stock, work space and the production of raw materials. This philosophy can maximize the production (Forza, 1996). At Malaysia context, application of JIT is not popular. According to Simpson, et al., (1998), JIT had been applied by national automotive firm as a transitory JIT. Transitory of JIT is one of the ad hoc inventory models. This is can give half of the inventory in order to reduce the production

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2 INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2 ICBER 2011) PROCEEDING

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cost beside can make the technology transfer...
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