when I need something, I need it immediately. This JIT is It is 9.30 am. The rays of the early sun are filtering in a risky and expensive proposition. We are very late in through the sheet glass that comprises the northeast wall of getting production materials. Unnecessarily, I have to opt Akash Ispat Engineering Co. Ltds boardroom. AIECL is for overtime and make use of air freight to meet delivery a 10-year old medium-sized Co. having a sales turnover of dates. about Rs.700 crore. The presence of just 6 people has made the room seem larger than it is. Azim Ahmad, a man Harbhajan Singh Whatever the problem, we must have in his late 50s started his career as a technical trainee who an effective pipeline. When I am not getting things in time, joined the Co. since its incorporation. At present , he is the how I can meet the sales target? We are losing our image chief production manager who always loves his machines and will soon lose sales. Competition is mounting. Out and never wants them to be idle. Harbhajan Singh, having competitors are now offering ready delivery. a long experience of a public sector steel Co. is always afraid of sales loss due to stock-out situations. K. Mathus K. Mathur (Interrupts and says) No more arguments and (ED), highly successful, dynamic and proactive, always excuses. I want action towards cutting costs. looks oike a dangerous man. Arun Lal, a traditional traffic manager, always offers his justification in quantitative and Kashi Nath (defending himself) The lead-time problem comparative terms. Kashi Nath, Purchasing Manager, quite can be sorted out by a trade-off between sales and a young man possesses a management background from production forecasts. I need information earlier. top 5 institutes of India. He always keeps his hands in Mathurs glove and is extremely conscious about inventory Harbhajan Singh Customers insist on promised prompt cost. D. Sahu, head of finance, a CA, a dedicated to cost delivery and I am helpless. reduction. Azim Ahmed Since a long time back, I have been insisting on the merger of purchasing and traffic in order Past performance of the Co. has been quite impressive but, to get closer to production. since the last two quarters, problems are cropping. Customers are making complaints regarding failure to K. Mathur ( Quite frustrated) If we want to survive, we meet delivery commitments. Transportation costs are have to cut transportation as well as inventory costs. increasing. Competition is increasing and demand is D. Sabu I appreciate the great job of Kashi Nath because decreasing due to an economic slump. Hence, the meeting our inventory-carrying cost is down by about 45%. But, I is called by the CEO to review the performance in general do agree that transportation cost has increased and inventory and transportation costs in particular along considerably. with customer c omplaints. K. Mathur (concludes the meeting with his remarks) I partly agree with Azims idea. But in my opinion, we must K. Mathur Look at the transportation cost. It has have an integrated system for all types of inventory and increased by 25%. If continued, it will eat us. We must traffic management. realize that today , transportation has tremendous cost- cutting potential. Mathur further asked Kashi Nath to submit a blueprint within a fortnight to him along with a plan of action. Arul Lal I know that transportation cost has increased by Questions 25% in the last 6 months but it is mainly due to Mr. Naths 1) Discuss the basic problem domain of the firm policy of JIT inventory system. He is never wants to keep along with the situations responsible for the inventory . That is why I am not in position to ensure a development of the problem. full-load to transporter at the same time. Quite frequently, 2) What should Kashi Nath do? I have to opt for more speedier modes of transportation, 3) Should Kashi Nath suggest a L&SC manager? If even air freight, to ensure timely delivery, I am helpless. yes, can an integrated system be developed to Kaml Nath (Interrupts) Mr Lal, as we are saving a lot by minimize total logistical costs? means of this system, I prefer air freights to make sure of getting what I need on time.