The just-in-time (JIT) inventory technique is a method of products on hand management. "The goal of such concepts, contrary to popular belief, is never to reduce inventory, although that's an appealing part benefit. Instead, JIT (like its imitators) is a regular process aimed at eliminating squander and resolving problems over the supply chain" (Minahan, 97, p. 45). Since its beginning in 1984, Dell Corporation, Inc. has set alone apart from opponents through innovation and creativeness. The company uses the JIT method of inventory management.
Many businesses use Dell's success as a business model. Dell's sales concept focuses on appointment the requirements of it is customers and building computers to buy, selling them directly to the consumer. "This immediate business model removes retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations. The direct unit allows the business to build every system to order and gives customers effective, richly-configured devices at competitive prices" (Dell, 2007, 1). In carrying out this perspective Dell has leveraged effectively its individual capital to operate a vehicle growth and brand commitment.
Dell has become very powerful with it; as a result, the organization carries low overhead cost by keeping inventory numbers low. Prior to adopting the JIT method, Dell struggled with managing financial situation. After implementing JIT, the organization saw a great improvement in inventory turnover and a reduction in the number of days worth of inventory on hand.
The company accomplished improvement by only positioning orders with suppliers when needed. Placing purchases JIT removes carrying expenses associated with managing inventory. Table one reflects the continuing reduction, displaying 5. 7 days of inventory on hand in 2001 and 3. four days of inventory on hand in 2004 (Morningstar, 2010). Gross annual inventory turnover increased via 64. several in 2001 to 107.
1 in 2004 (Morningstar, 2010).