Inventory management
Introduced| English | Meaning |
|---|---|
| just-in-time/dʒʌst ɪn taɪm/ | A production and inventory approach in which supplies arrive close to when they are needed, reducing stock held. |
| stock/stɒk/ | stock |
| inventory/ˈɪnvəntri/ | Stocks of materials, work in progress and finished goods held by a business. |
| delivery/dɪˈlɪvəri/ | delivery |
| re-order level/riː ˈɔːdə ˈlevl/ | re-order level |
| buffer stock/ˈbʌfə stɒk/ | The minimum held to cope with delays or demand spikes. |
| lead time/liːd taɪm/ | The gap between ordering and delivery. |
| just-in-case/dʒʌst ɪn keɪs/ | just-in-case |
| suppliers/səˈplaɪəz/ | Businesses or people that provide goods, materials or services to another organisation. |
Just enough, just in time 准时制
- Too little stock 存货 and production halts; too much and cash is tied up in a warehouse.
- Inventory 库存 (stock) management walks this tightrope.
Leadership style lab
Pick the management style that fits each situation.
On a stock control chart, the re-order level is the stock level at which:
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Reaching the re-order level triggers a new order.
The stock control chart
- As stock is used up, it falls; when a delivery 交货 arrives, it jumps back to the maximum.
- Key levels: maximum, re-order level 再订货水平 (place an order), and buffer stock 缓冲库存 (the safety minimum).
With on-time deliveries, stock falls as it is used and returns to the maximum after each delivery.
Buffer stock is held to:
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Buffer stock is a safety minimum.
Lead time is the gap between placing an order and receiving the delivery.
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Longer lead times require higher buffer stock.
Lead time 交货周期 and buffer stock
- Lead time is the gap between ordering and delivery.
- Buffer stock is the minimum held to cope with delays or demand spikes.
A benefit of just-in-time (JIT) is that it:
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JIT minimises stock and frees cash, but relies on reliable supply.
Holding extra stock for safety, in case of problems, is the just-in-______ approach.
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Just-in-case holds buffer stock; just-in-time holds almost none.
JIT vs JIC
- Just-in-time (JIT): hold almost no stock; materials arrive as needed. Frees cash, but risky if supply fails.
- Just-in-case 备货制 (JIC): hold buffer stock for safety. Reliable, but ties up cash.
Just-in-time holds almost no stock; just-in-case keeps a buffer for safety
JIT saves cash but removes the safety net. With no buffer stock, a single late delivery stops production. JIT needs very reliable suppliers 供应商 — its strength is also its weakness.
You've got it
- the stock control chart shows usage, re-order level, deliveries and buffer stock
- lead time = order-to-delivery gap; buffer stock = safety minimum
- JIT (no stock) frees cash but is risky; JIC (buffer stock) is safer but ties up cash
Write from a buffer of 30 units
- A firm keeps a buffer of 30 units.
- Lead time is 4 days.
- Say what the buffer is for, and what JIT would do instead.
A firm holds a buffer stock of 30 units, and the lead time from order to delivery is 4 days. What is the buffer for, and how would just-in-time production treat that stock?
Buffer stock covers the wait. JIT tries not to hold it.
What is the stock of 30 units called?
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The safety minimum is the buffer.