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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