Just in Time Purchasing

Just In Time Purchasing

        Just in Time purchasing is another essential component of just in time environment. Just in Time purchasing means the companies will purchases the raw material and resources when needed. Therefore, company should choose the best supplier in order to purchases raw material and resources. It is the responsibility of purchasing department to get the best supplier by managing supplier relationship. To manage supplier relationship, first company should reduce the number of suppliers by choose the supplier that can fulfill company request to purchase raw material and resources in a large quantity. Second, purchasing department should consider in entering into a long term contract with selective supplier so that company will have a regular supplier to order raw material and resources when needed. Third, purchasing department need to specifying quality standard in supplier contract to reduce the time for inspection. Lastly, purchasing department need to focus on managing supplier relationship by using e-commerce application to place order. This method looks friendly and it make easy to manage with supplier.

Advantages of Just In Time

        Advantages of Just in Time is it able to reduced set up time and cost in warehouse such as carrying cost, storage cost, handling cost as well as fewer losses due to spoilage or theft. Besides that, Just in Time will improved flows of goods through warehouse. This is because no inventory after the process is end. Other than that, Just in Time can make scheduling more consistency. This is due to production will only be run when there is demand. If no demand, workers does not have to work thus they can do another job in warehouse that would not be necessary be done on a normal day. Furthermore, Just in Time will increase emphasis on supplier relationships because company is relying on goods from supplier when needed. Therefore, having a trusting supplier relationship is important.