Just in Time Production at Hewlett-Packard, Personal Office Computer Division
Question 1: Should it be easier to run JIT effectively on the 150 than on the 120? Explain. It would be easier to run JIT effectively on HP-150 referring to the information given in the beginning of the case. HP-150 needs less number of parts and in the end it will be need less inventory. There are 20000 active part numbers for HP-120 and its options vs 450 part numbers for HP-150. HP-150 also needs less suppliers (200 ) in comparison to HP-120 (2000 suppliers and its option) , it helps to build and maintain efficiently a long term relationship. HP-150 has less varieties, 17 kinds of Keyboards while the CPU stays the same. HP-120 on the other there were on average of 6 options per product. In the endless varieties provides fewer inventories and higher flexibility to the process.
Question 2 : How serious is the forecasting problem ? In other words, does success with JIT depend on good forecast ? A good forecast for Just in Time is very crucial, because JIT significantly reduces the number of raw materials, WIP inventories and finished goods on hand. It depends on accurate information id Est on the time deliver the right raw material in the right place where you want them to be and the right amount, in order that less forecast errors occur. It’s very important to select the right suppliers for your business and after time has passed by, the relationships’ between you and the company becomes closer and creates more flexibility and collaboration (less forecast errors)
Questions 3 : What is a natural explanation for the plunge in sales in the third month ? I assume that it could be because of the high competition which took place in the 1980´s and the rapidly changing technologies during that time. The HP-150 was launched in 1983 , were many competitors were out there like IBM, Apple, Compaq etc. , which were also launching new products most of the time. Nevertheless, HP-150 was one of the earliest commercialized touch screens computers out there , but due to the fact that the compatibility was restrained because most of the PC were IBM-PCs (clones) (not IBM-PC compatible) it had to be replaced with IBM-PC compatible Vectra Series in 1985 Short-life-cycle Product.
Question 4: What is another, probably more significant, reason for purchased stocks to stay high despite the JIT efforts? The possible reason might be the intentions of the POD to reduce costs, as larger stocks can reduce costs (economic of scales, discounts for large orders). An alternative reason can be forecast inaccuracy or intentions to hedge out-of-stock risks if something goes wrong. The inventory should also be piled up in order to prevent MUDA.
Question 5: “Honoring commitments” sounds like buying materials that you don’t need or before you need them – which is contrary to the ideal of JIT receipt of materials. Is this a flaw in the POD approach? I believe that in this situation “honoring commitments” helps to to establish trustworthy relationships with core (main) suppliers. In this way the company demonstrates consistency in its actions and commitment to core suppliers. Especially in the long run the strategy will turn out well between the relationships of supplier-buyer.
Question 6: Does it make sense to inform everybody about down time at somebody else’s work station (a negative event)? I think it is of high importance to the upstream and downstream work stations which may be influenced by such down time, so that they could adjust their actions accordingly. it is also important for supervisors and managers to quickly identify the problem and come up with ideas in order to tackle/solve that problem . Playing different music is here to differentiate the reason of the down time.
Question 7: Why have the two units between the stations?
The 2 units serve as back up mechanisms, which helps to prevent line disruptions and slow downs .The number of...
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