Chapter 4.1. Chapter 4.1 Definitions Business – The manufacture and/or sale of goods and/or...

Chapter 4.1

Chapter 4.1 Definitions

• Business– The manufacture and/or sale of goods and/or

services to meet the needs of a marketplace and to produce a profit

• Inventions– They are new products that are based on a

creative idea; eg. Telephone, microwave,

Chapter 4.1 Definitions

• Innovations– These are modifications to existing invention that

take the inventor’s initial concept even further– Examples: Coke Zero, cell phones,

• Just-in-time (JIT)– This is a inventory control system that schedules

products to arrive as they are needed for manufacturing or for supply to customers

Chapter 4.1 Definitions

• Kanban– This is a Japanese philosophy that has a major

principle of the elimination of waste (time, labour, and resources).

– Similar to JIT

Chapter 4.1 Short Answer

• New Technology– Technology can occur on a large scale (ATM’s,

internet banking) or on a small scale (re-sealable bags for snack foods

Chapter 4.1 Short Answer

• New Processes – Manufacturing: a change in the way something is

made – robotic equipment in auto manufacturing– Distribution: e-mail and the internet have allowed

business to deal directly with their customers; FedEx allows for overnight delivery

Chapter 4.1 Short Answer

• New Processes – Inventory Control: Just-in-time (JIT)– Accounting: new accounting systems allow for

instantaneous reporting of profit, inventory levels, etc.

– Marketing: big box retailers provide extensive variety of one type of merchandise e.g. Chapters.

Chapter 4.1 Short Answer

• New Processes – “Data Mining” – a new form of Market Research

that connects specific customer characteristics to their purchases

Chapter 4.1 Short Answer

• New Attitudes– Environmental awareness and concern– Health concerns– Social conscience

JIT Article

• How do the Japanese approach productivity? Do you think this is a good strategy?

JIT Article

• How do the Japanese approach productivity? Do you think this is a good strategy?– “The Japanese approach to productivity

emphasizes on two factors: elimination of waste and respect for people”

– This is a good strategy; happy workers are productive workers.

JIT Article

• Does JIT require a lot of investment? Why or why not?

JIT Article

• Does JIT require a lot of investment? Why or

why not? NO– An interesting thing about JIT is that it does not

necessarily require heavy investments in equipments or systems. Some of the techniques like Kanban are very simple, making use of different types of cards to signal movement of goods.

JIT Article

• Does JIT require a lot of investment? Why or why not? – Minimized set up times are achieved not

necessarily by costly technologies, but by doing things differently and utilizing people and machines in an optimal manner.

– JIT is all about organizing/structuring a plant or warehouse so all resources including employees can function at their optimal level.

JIT Article

• Describe the 2 different types of how the Japanese are loyal?

JIT Article

• Describe the 2 different types of how the Japanese are loyal? – Loyalty of workers – Subcontractor network: Japanese industries work

on long-term supplier-customer relationships – Bottom-round management: The Japanese style of

management is more of consensus than compromise and of collaboration than confrontation.

JIT Article

• What are some of the drawbacks (disadvantages) wit JIT? – Logistical Issues: Use suppliers that are close to

reduce lead times (not always the cheapest option)

– Fluctuations in demand: JIT system can work efficiently only on the basis of `freeze windows', where the estimated demand is frozen and the production plan is based on this estimate.

JIT Article

• What are some of the drawbacks (disadvantages) wit JIT? – Fluctuations in demand: JIT systems cannot per se

tolerate demand fluctuations beyond 10%. – Transportation Costs: Frequency and small orders

increases the costs

JIT Article

• In your opinion what is the biggest advantage in JIT?

JIT Article

• In your opinion what is the biggest advantage in JIT? – Cost savings due to reduced inventory levels