Page 311 - DMGT501_OPERATIONS_MANAGEMENT

Unit 13: Supply Chain Management and JIT

Close ties with the suppliers: Services that play with volumes like a fast food joint and mass Notes
merchandisers require close contact with the suppliers. Application of JIT, not only ensures
more frequent shorter lead times but also the quality shipment of the supplies
Flexibility of the work force: Greater is the level of customization in the workforce, more will be
the requirement for multi-skilled labor. There should be enough flexibility in the workforce to
deal with different problems.

Example: An electronic repair shop needs wider experienced workforce to deal with the
variety of equipments. They need skilled workforce to diagnose the problem correctly and then
repair the defects.
Automation: This can play a major role in providing JIT services. Now-a-days we see the
widespread network of ATMs which are a good example of JIT concept in services.

Preventive Maintenance: Services that are highly dependent on the use of machinery and
components to effectively deliver the service should have good preventive maintenance system
in place. It helps in providing services efficiently without any significant delay. Services like
transportation requires mechanical modes of transportation and properly working spare parts
etc.
Pull method of the flow of material: Service items where tangible items are processed like pizza
outlet can reap in the benefits of pull factor.

Line flow strategy: The managers in the service system can easily recognise the employees and
equipments under them and their capabilities. This helps in achieving a uniform flow throughout
the system. It also helps eliminate wastage of employee's time.

Example: Banks use this method in faster processing of the Cheques.
Improvements in process and problem solving ability of the firm can contribute heavily in
streamlining of the system: This results in higher customer satisfaction and greater employee
productivity.
Simplification of the process, especially when customers take part in the system: The strategy is
to simplify the system of operations and service delivery when customers themselves are
involved in the process like in self service retail outlets, ATMs, Vending machines etc.
JIT in services, if achieved can be a major source of competitive advantage: This gives an edge to
the service firms over other firms. This is their ability to provide services whenever required.

Case Study Indian Detergent Market: Nirma vs HLL

etergent Powder was introduced in India by the Soap & Detergent Division of
Hindustan Lever Ltd. (HLL) in 1954, a subsidiary of Unilever. The division had
Dtwo major products, 'Surf' detergent powder and 'Rin' washing soap. HLL viewed
the products as middle class products. This was not a large market but HLL provided high
quality products giving it a reasonable profit margin. Its product 'Surf' emerged as the
market leader in detergent powder. 'Nirma' was established by Karsan Patel in Dec. 1969.
Traditionally, clothes were washed by hand using hard yellow bars of laundry soap.
Karsan Patel saw this as his market. This accounted for 95% of the detergent market.
Contd...

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