The ability to think ahead and minimize unnecessary losses that can be avoided remains critical to financial success in the world of business. Nowadays, there is a range of approaches to resource control and planning that help various companies meet the needs of target customers. In this post, attention is paid to the ability to use JIT, MRP, or the combination of these approaches to facilitate collaboration between Feets (a chain of sportswear stores) and shoe vendors.
Being a large company headquartered in the United States, Feets is interested in building fruitful relationships with new vendors. To become effective business partners, shoe vendors need to choose an appropriate production planning framework, and the combination of JIT and MRP can be helpful. MRP is a logistic model that emphasizes the role of sales forecasts in production, whereas JIT focuses on the role of actual orders. Despite the differences between these approaches, it is possible to combine them to create an integrated framework.
Even though its flexibility is relatively low, MRP possesses numerous advantages to shoe vendors at Feets, such as the availability of production materials, fast delivery of goods to end-users, and the ability to collect data to be used for the purpose of analysis (Segerstedt, 2017). In general, the benefits of the model can be reduced to the accuracy of calculations coupled with the availability of data indicative of the popularity of different goods. In other words, the use of MRP systems by Feet’s shoe vendors would help to keep track of key trends and build accurate production schedules. Apart from that, when speaking about the advantages of MRP for shoe vendors, attention must be paid to the fact that such systems can be extremely helpful in the production of various seasonal goods. Thus, it is possible to use information concerning demand in order to solve issues related to staff shortage and similar problems upon reasonable notice.
JIT would also provide shoe vendors with new opportunities since the system emphasizes the production of goods in demand, and, therefore, it would contribute to the attractiveness of new vendors for the company under discussion. As is stated in the case, Feets relies on productivity when collaborating with vendors, and very large orders are preferred from efficiency and economic rationalization considerations (Chopra & Meindl, 2013). Shoe vendors can benefit from the use of JIT because it supports the principle of orderliness and allows minimizing space required for storage, reduces the probability of spoilage, and, consequently, helps to save financial resources (Othman, Kaliani Sundram, Sayuti, & Bahrin, 2016). However, these advantages are more applicable to small businesses, whereas shoe vendors, in this case, will need to work with a large sportswear retailer.
It is clear that both MRP and JIT can be advantageous to shoe vendors working with Feet because the benefits of these systems are reflective of the company’s requirements and expectations, such as operational flexibility, reduced lead times, promptness of order fulfilment, and appropriate inventory turnover. The necessity to create an integrated system using the advantages of MRP and JIT can involve significant challenges. Thus, these two approaches can be in conflict if specific goals are not set (Ezema, Okafor, & Okezie, 2016). Being a fashion-oriented company, Feets values accurate customer behaviour forecasts, and shoe vendors responsible for manufacturing should be able to respond to customers promptly. Among the key objectives surrounding the creation and the implementation of an integrated production system is the distribution of tasks between the two approaches under discussion.
The use of an integrated approach to product manufacturing would help shoe vendors collaborating with Feet to execute orders in a timely manner. In the final system, the elements of MRP would be responsible for fulfilling three important tasks. First, it would allow solving tasks related to production materials, their availability, and quality. To start production, shoe vendors would use MRP software in order to control the presence of raw materials for shoe production such as plastic, wood, or foam (Iqbal, Iqbal, Bhatti, Ahmad, & Zahid, 2016). Also, the software would be helpful in ensuring the appropriate quality of materials and keeping track of the situation with finished products. The elements of the JIT framework would help shoe vendors to maintain production efficiency and prevent financial losses by managing production waste and minimizing the share of faulty goods.
Supposing that vendors manufacture shoes in China, Feets is in a more advantageous position due to lower production costs and the lack of staff shortage. In spite of that, additional shipping expenses (Feets is based in the United States) and even the “made in China” stigma would require shoe vendors to make maximum use of the integrated approach to production and design a unique defect reduction strategy (Bienenfeld, Botkins, Roe, & Batte, 2016). Also, considering shipping costs, human errors during the preparation for delivery would need to be eliminated.
In the end, the production strategy at the confluence of JIT and MRP approaches would be more likely to present a pull system due to product seasonality. Apart from that, significant changes in customer preferences and high competition would require shoe vendors to avoid overproduction and focus on actual orders received from Feets. Given the correct application of the system, it would be extremely helpful to shoe vendors.
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Chopra, S., & Meindl, P. (2013). Supply chain management: Strategy, planning, and operations (5th ed.). New York, NY: Pearson.
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Iqbal, M., Iqbal, N., Bhatti, I. A., Ahmad, N., & Zahid, M. (2016). Response surface methodology application in optimization of cadmium adsorption by shoe waste: A good option of waste mitigation by waste. Ecological Engineering, 88, 265-275.
Othman, A. A., Kaliani Sundram, K. V. P., Sayuti, N. M., & Bahrin, A. S. (2016). The relationship between supply chain integration, just-in-time and logistics performance: A supplier’s perspective on the automotive industry in Malaysia. International Journal of Supply Chain Management, 5(1), 44-51.
Segerstedt, A. (2017). Cover-time planning/Takt planning: A technique for materials requirement and production planning. International Journal of Production Economics, 194, 25-31.