Beruflich Dokumente
Kultur Dokumente
Tacloban College
DIVISION OF MANAGEMENT
Magsaysay Blvd., Tacloban City
JUST-IN-TIME AND
LEAN OPERATIONS
Submitted by
JASON L. PADUL
MM-BM II
Submitted to
I. INTRODUCTION
SHOPIFY Fashion Sale and Business Exhibit was a retail garage sale and business fair
organized and implemented by a group of Business Management Graduate School
students of the University of the Philippine Visayas Tacloban College taking up BM 240
(Operations and Production Management). The activity was designed to complement
the Vegetable Production Project of the group and was geared to provide augmentation
funds for the students’ foreign educational trip to South Korea. The idea came upon
when the group was looking for a fund-raising activity that would entail minimal capital
funds and operating costs but would generate plausible revenues to support the
group’s objectives, hence a garage sale best fit the requirements.
The main concept of SHOPIFY is a garage sale to sell pre-loved items – clothes, shoes,
books, and appliances of the students. The products will be sourced from their
respective closets or through their network of colleagues. In addition to the garage
sale, the students agreed to use SHOPIFY as a venue for local businesses and
entrepreneurs to showcase their products and services. With this, SHOPIFY became
the materialization of the planned marketing activity the group had way back in 2017.
SHOPIFY Fashion Sale and Business Exhibit started its operation on April 13, 2018 and
ended on April 22, 2018, for a total of 10 operating days at the Community Center,
Tingog Sinirangan Headquarters, Sagkahan, Tacloban City. During its operation, the
activity earned a revenue of over Php 80,000.00 excluding the individual sales of its
10 local exhibitors.
1| S H O P I F Y
available at the time. Toyota’s approach came to be known as the Toyota Production
System (TPS), and it has served as a model for many implementations of lean systems,
particularly in manufacturing (Stevenson, 2015).
A widely held view of JIT/lean production is that it is simply a system for scheduling
production that results in low levels of work-in-process and inventory. But in its truest
sense, JIT/lean production represents a philosophy that encompasses every aspect of
the process, from design to after the sale of a product. The philosophy is to pursue a
system that functions well with (1) minimal levels of inventories, (2) minimal waste, (3)
minimal space, and (4) minimal transactions (Stevenson, 2015).
Step by step, the lean movement has penetrated other industries, like retailing. Lean
Retailing is now a reality that has forced manufacturers to build standard products on
demand using build-to-order techniques. The retail markets are characterized by a
strong competition, short product life cycles, long product development lead times, and
highly volatile demand (Naruo and Toma, 2007).
Lean is a modern retail operating strategy which requires maximum efficiency coupled
with identification and elimination of waste. It requires simple workflow, eliminating the
loss of effort, time, materials and motifs. With acceptance of lean approach managers
are able to reduce activities that add no value, directly impact and help prevent the
potential problems, and improve global operational flow (Lukic, 2012).
Similar to the concept of lean manufacturing, the concept of lean retail is known by
many names and variations in the literature: lean logistics, lean distribution and lean
consumption. Attempt to apply lean concept in retail is recent - it dates from 90s of the
2| S H O P I F Y
last century. The core of lean retail is primarily a commitment to eliminating waste.
Similar to the manufacturing sector and following the model of lean approach, the main
types of waste in retail are: excess inventory, product defects, unnecessary motion,
redundant employees and a waste of time. Managers in retail can use similar tools and
principles for identifying all types of waste to improve their operational efficiency. Lean
techniques include: (1) simplifying the design of work (organization of individual work
process should be such as to provide a high degree of feasibility and possible control,
so that it has clear start and finish), (2) the use of withdrawal (pull) to create a
replenishment (provided that the supply of goods is fuelled with actual demand of
customers, as opposed to forecasts or anticipated demand, so to keep inventory levels
low and free space), (3) removing the bottlenecks through the supply chain (by
eliminating inefficiency with shorter delivery time, lower transport costs and defects,
and improving the flow of goods and operational performance) and (4) elimination of
waste of effort, time, materials and movement (by identifying the core business values,
with the elimination of excess movement, time, materials and labor used in the
process) (Lukic, 2012).
Due to its nature, lean operations on SHOPIFY primarily focuses on its inventory
management practices – that is minimizing wastes due to excess inventory, defective
products, transport costs and unnecessary manpower.
INVENTORY MANAGEMENT
3| S H O P I F Y
Due to the limited time available for manual checking and product review,
SHOPIFY accepted and displayed all received inventories from suppliers. This
resulted to a large volume of unsold inventory after SHOPIFY’s operations.
Majority of the unsold products were off-season and slightly-damaged items.
Due to the influx of inventory, consumers are overwhelmed with the variety and
volume of options to choose from. The large volume of items to choose from
may sound beneficial, however with the limited time of buyers to spend at the
shop, scanning through the racks creates a fast-paced motion wherein
consumers cannot thoroughly scan the items, thus hindering for majority of the
product to be noticed. This is particularly true with the clothing items for
women.
In contrast with women’s fashion items, there was relatively lower volume of
men’s fashion items to choose from. Although there was still a significant
volume of unsold men’s fashion items, inventory for summer-related wearables
were running low with some consumers asking for additional stock.
TRANSPORT COSTS
4| S H O P I F Y
UNNECESSARY MANPOWER
This was not actually an issue as there was a lack of manpower due to the
unavailability of some members because of work-related concerns. However, if
during weekends, there is an influx manpower as majority of the group
members were present to man the shop. Had SHOPIFY observed lean
operations, the hired employees during the weekdays could have been offered
days off during the weekends meaning savings for the group in terms of labor
cost. However, due to some inevitable circumstances, having the hired
employees over the weekend proved to be beneficial for the group as members
had their personal engagements to settle during these days.
V. RECOMMENDATIONS
If ever the group decides to bring back SHOPIFY in the coming months, the main
recommendation to observe lean operations id to create a centralized inventory system
which sorts and identifies the proper inventory number and product classification to be
displayed and sold. Moreover, having a centralized inventory system would aid the
group to prevent the reoccurrence of the dilemmas faced the last time – lost price tags,
bargain price and discount issues, and lost and theft issues.
5| S H O P I F Y
REFERENCES
Printed Sources
Lukic, R. 2012. The Effects of Application of Lean Concept in Retail. " Economia. Seria
Management, Faculty of Management, Academy of Economic Studies,
Bucharest, Romania, vol. 15(1), pages 88-98, June.
Naruo, S., Toma, S. G. 2007. From Toyota Production System to Lean Retailing.
Lessons from Seven-Eleven Japan. University of Bucharest. Faculty of Business
and Administration.
Electronic Sources
www.investopedia.com/features/industryhandbook/retail.asp#ixzz5GbgbU2KW
6| S H O P I F Y