Analysis of JIT and Service Attributes in Operations and Technology

This report provides an overview of the Just In Time (JIT) concept within operations and technology management, highlighting its aims to reduce waste and inventory while improving efficiency. It discusses the advantages of JIT, such as reduced work-in-progress and improved service quality, as well as its limitations, including vulnerability to disruptions and increased transportation costs. Furthermore, the report details the four key characteristics of a service: intangibility, perishability, inseparability, and variability, explaining how these attributes impact service delivery and customer expectations. The document concludes by emphasizing JIT's importance in cost reduction and customer satisfaction, alongside the unique challenges and attributes inherent in service-based offerings. Desklib provides a platform to explore more assignments and study tools.

RUNNING HEAD: Operations and Technology Management
Operations and
Technology
Management

Operations and Technology Management 1
Contents
Introduction ..................................................................................................................................... 2
JIT Concept in the practice of Operations and Technology ........................................................... 2
Major Shortcomings of the JIT Production Approach .................................................................... 3
Characteristics/ Attributes of a Service ........................................................................................... 4
Intangibility ................................................................................................................................. 4
Perishability ................................................................................................................................. 5
Inseparability ............................................................................................................................... 5
Variability.................................................................................................................................... 6
Conclusion ...................................................................................................................................... 6
References ....................................................................................................................................... 7

Operations and Technology Management 2
Introduction
With the increasing competition around the globe, the business environment is changing at a fast
pace thereby pressurizing the manufacturers for quicker responses and adopting shorter product
life cycles in order to meet the rapid demands of the customers. Therefore, the changing
customer demands are significantly managed with the help of a wiser approach named Just In
Time (JIT) philosophy. JIT has completely transformed the economy of the globe by changing
the face of manufacturing and has brought about a significant rise in profits (Shin, Ennis &
Spurlin, 2015). It is both a philosophy and a set of methods and techniques for management
utilized for the purpose of eliminating waste (particularly inventory). The report also throws light
on the various attributes of a service.
JIT Concept in the practice of Operations and Technology
Just In Time (JIT) can be defined as the manufacturing of the required items in the required
amount at the required phase. In other words, JIT concept aims at the provision right product at
the right place in right quantity at the right time. For the purpose of achieving the 4Rs, the
necessity arises for a pull system of inventory. JIT focuses on the creation of more responsive
logistics systems and reduction of levels of inventory thereby avoiding the surplus inventories.
JIT can also be described as an inventory strategy which is employed by the companies in order
to increase their overall efficiency and reduce inventory costs by decreasing the waste by the
way of receiving goods only when their requirement arises in the process of production. It aims
to address issues related to poor quality of products, delivery of incorrect part or quantity and
high cycle times (Stevenson & Hojati, 2007).
The major goals of JIT involve arriving at the zero inventory level with the reduction in the setup
costs for the achievement of smallest economical lot size. The goals also includes production of
the items at the required rate of the customer, safety stocks minimization, implementation of a
program related to total quality control, elimination of needless lead time and the optimization of
the flow of materials from the suppliers till the point when the finished product is sold such that
the inventories are optimized (Lou, et. al., 2015).
The adoption of JIT concept provides advantages to the business in terms of reduction in work-
in-progress and inventories along with the reduction in space occupied with the inventory. It

Operations and Technology Management 3
helps in the provision of improved services to the ultimate customer with improved quality as a
result of greater involvement, motivation and participation of the employees in the processes.
This ultimately leads to greater productivity and smoother work flows (Chiarini, 2017).
For the implementation of an effective JIT, prerequisite arises of the establishment of a total
quality control system along with the maintenance of good communications. There must be
strong commitment of the management for the achievement of the set goals. For this purpose, the
employees must also be encouraged for involvement along with the provision of requisite
flexibility in operations. The most important requirement of JIT is the stability of demand and
reliability of the vendor upon which the whole process depends. For this purpose, processing of
low variety of items should be arranged at a time.
This production approach is also adopted by the Toyota in its manufacturing in order to become
successful in the motor market around the globe. The production strategy adopted by Toyota is
highlighted in the fact that the raw materials are received in the production floor only on the
receipt of order or at the start of production process and not earlier. The parts are allowed at a
node only when their requirement arises for the next node or when they are a part of an assembly
for the next node. This philosophy has helped Toyota in keeping minimum amount of inventory
required along with the minimization of costs. Toyota aims minimization of waste through just in
time production by the way of attacking waste and achieving streamlined production through
employee participation, continuous improvement and total quality control. This philosophy has
allowed Toyota to adapt the changes in demand as quickly as possible without worrying
regarding the disposing of expensive inventory.
Major Shortcomings of the JIT Production Approach
JIT often suffers from various shortcomings or limitations which in turn can have substantial
bearing on the company in cases if they occur.
 Vulnerability- Due to the zero inventory system of JIT, it always faces the risk of
changes in demand, plant shutdowns and various other uncertainties. Moreover,
situations like sudden increase in the prices of the required materials due to natural

Operations and Technology Management 4
disaster or shortage can result ultimately result in the incapacity of the company to
effectively serve its customers.
 High Cost of Transportation- The delivery of the items only in need leads to the ordering
of small and frequent lots which in turn causes delay lead to more delays due to highway
congestion and ultimately can result in higher cost of transportation.
 Interruptions due to security- Manufacturers may face various interruptions due to the
application of increased security in the JIT system and can therefore delay the shipments
at the border crossings.
 Lack of control over time frame- The delivery of goods to the ultimate customer of the
manufacturer is significantly delayed due to the reliance of the manufacture on the
timeliness of the supplier of materials for every order. This in turn can affect the
reputation of the business in the minds of the ultimate customers.
 Requirement of more planning- The sales variances and trends are better understood by
the companies with the help of JIT inventory management. Moreover, the requirement
of materials also varies at different times. Therefore, proper planning requirement arises
for the inventory level in a way such that the suppliers are able to meet the requirement
of different volumes at different times (Barlow, 2015).
Characteristics/ Attributes of a Service
Service can be defined as anything done for a client, the creation and delivery of which is a
simultaneous process (Claessens, 2015). The four characteristics or attributes of a service involve
intangibility, perishability, inseparability and variability. These attributes have been further
explained below.
Intangibility
Unlike products which possess tangible attributes that are capable enough to provide relevant
information to the customers in order to make comparison of the given product with other
products, services cannot be touched, felt, sensed or tested before they are availed by the
customer. In other words, services are intangible. Therefore, a service is often referred to as an
abstract phenomenon which faces trouble in convincing customers while making the purchase.

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Customers make the purchase decision regarding the services without adequate information. This
difficulty is resolved with the help of introduction of physical evidence of the service
(Weibenfels, 2014).
For example, while paying for a ticket online, a person does not have an idea regarding the
quality of service. The promises made by the airline is relied upon by the person and that
promise is intangible.
Perishability
Services are considered extremely perishable which means that time plays an important role in
the marketing of the services. In other words, if the use of the service is not made within time, it
is lost forever as it cannot be stored for future sale or use. The proper management of the demand
and supply can significantly help in overcoming this challenge. The development and use of a
service is almost simultaneous process. The demands of the consumers are often increased due to
the time constraint (Macintyre, Parry & Angelis, 2011).
For example, if all the seats of an airline is not sold in a particular flight, then the chance of
collecting revenue from them and filling those seats is irreversibly and immediately gone.
Inseparability
Inseparability is another characteristic of a service. A service cannot be separated from the
service providers. It means that it is inseparable from the service provider since the creation and
consumption of services are simultaneous (Olufisayo, 2011). Unlike products which are taken
away from the producers after production, the production of services is made at or near the point
of purchase. This attribute of inseparability also results in increased expectations of the
customers regarding the performance of the service and is sometimes often converted into
disappointment in cases where those expectations are not met (Learn Marketing, 2017).
For example, a hotel room cannot be taken home for the purpose of consumption, therefore this
service must be consumed at the point of provision. In the same way, for providing services,
hairdresser needs to be present for the provision of services.

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Variability
Another characteristic of a service is variability. It means that the service is varied every time
due to the changes in service provider, environment, location, time and manner, etc. The services
provided by humans are more susceptible to variability in comparison with the services provided
by the way of automation. The services provided by the service provider cannot be standardized
or uniform. There always remain some differences in service since it is very difficult to make
every service experience indistinguishable. However, systems and procedures are applied in
order to make sure that consistency is obtained in services (Martin, 2007).
For example, the call rates vary from company to company in telecom industry. Some companies
provides services at a higher rate and are expensive while some provides in reasonable rates.
Conclusion
The JIT concept proves to be an important concept for the purpose of reducing the costs related
to production, bringing about efficiency in the contemporary business operations and the
attainment of ultimate satisfaction of the customers (Wild, 2017). The report also provided
details regarding four important characteristics/ attributes of service namely intangibility,
perishability, inseparability and variability. A service cannot be seen or felt but still provides
satisfaction to the receiver in the same way as provided by a product.

Operations and Technology Management 7
References
Barlow, P. 2015. Just in Time (JIT) Advantages and Disadvantages, [Online]. Available at:
https://babington.co.uk/blog/accounting/just-in-time-advantages-and-disadvantages/ [Accessed
on: 4 January 2017].
Chiarini, A., 2017. An adaptation of the EOQ formula for JIT quasi-pull system
production. Production Planning & Control, 28(2), pp.123-130.
Claessens, M. 2015. CHARACTERISTICS OF SERVICES: WHAT IS A SERVICE – AND WHAT
MAKES IT SO SPECIAL?, [Online]. Available at: https://marketing-insider.eu/characteristics-of-
services/ [Accessed on: 4 January 2017].
Learn Marketing. 2017. Characteristics of a Service, [Online]. Available at:
http://www.learnmarketing.net/mobile/characteristicsofaservicemobile.htm [Accessed on: 4
January 2017].
Lou, Y.I., Wang, H.C., Chen, J.C., Vatjanasaregagul, L. and Boger II, E.P., 2015. Merging Just-
in-Time (JIT) Inventory Management with Electronic Data Interchange (EDI) Impacts on the
Taiwan Electronic Industry. Open Journal of Accounting, 4(03), p.23.
Macintyre, M., Parry, G. and Angelis, J. 2011. Service Design and Delivery. Springer Science &
Business Media.
Martin, M. M. 2007. Services Marketing: Focus on Service Characteristics to Create
Competitive Advantage, [Online]. Available at: http://cascadebusnews.com/business-
tips/marketing/176-services-marketing-focus-on-service-characteristics-to-create-competitive-
advantage [Accessed on: 4 January 2017].
Olufisayo. 2011. Service Marketing: 5 Major Characteristics of Services, [Online]. Available at:
http://www.entrepreneurshipsecret.com/5-major-characteristics-of-services/ [Accessed on: 4
January 2017].
Shin, S., Ennis, K.L. and Spurlin, W.P., 2015. Effect of inventory management efficiency on
profitability: Current evidence from the US manufacturing industry. Journal of Economics and
Economic Education Research, 16(1), p.98.

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Stevenson, W.J. and Hojati, M., 2007. Operations management (Vol. 8). Boston: McGraw-
Hill/Irwin.
Weibenfels, C. 2014. A New Paradigm in Marketing – The Service Dominant Logic: Academia’s
Reactions to the Theory of Vargo and Lusch. diplom.de.
Wild, T., 2017. Best practice in inventory management. Routledge.