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1、Yijun Gu, MScHwTMHospitality and Tourism DynamicsThe advantages and limitations of implementation JIT within food and beverage business IntroductionThe expanding of global competition emerge the new technologies, satisfy the continuously increasing of customers expectations for products and services
2、 they pay. Consequently, in the near decade, more and more manufacturing and service companies have been challenged to increase their focus on customer demanding and satisfaction with the quality of products and services.The restaurant industry sales grow on 2.5 percent in 2009; it is in the USA alo
3、ne, the 945,000 restaurants generated US$566 billion in revenue. It is almost fourteen times than 1970. On a typical day restaurant industry sells 1.5 billion in 2009. (National Restaurant Association, 2009) The competition between the table at the restaurant and the table at home will continue almo
4、st forever. Nowadays, under the time-pressed and labor-short economy, everyone is looking for a way which quicker, more efficient and convenient to prepare food to eat. As the owner of the restaurant, you have to prepare food for consumers better, faster, and safer than the competitors. In order to
5、achieve this, the owners need a more efficient, flexible and lower costs approach than the traditional approach to meet consumer demands, which will be discussed in this paper. The paper aims to critical discuss the advantages and limitations of lowering the inventory levels within food and beverage
6、 businesses by the implementation of the lean operations strategy. The concept of Just-in-Time (JIT) approach will be introduced at the first section of the paper, and then the benefits and constraints of the JIT approach within restaurant industry will be discussed. Literature reviewNigel Slack et
7、al. (2001, p.482) stated that JIT means producing products and services exactly when needed (neither before nor after), in exactly quantities (not more nor less), and exactly where needed (not to the wrong location). A fuller definition which claimed by Voss (1987):“Just-in-time (JIT) is a disciplin
8、ed approach to improving overall productivity and eliminating waste. It provides for the cost-effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resour
9、ces. JIT is dependent on the balance between the suppliers flexibility and the users flexibility. It is accomplished through the application of elements which require total employee involvement and team-work. A key philosophy of JIT is simplification.”Nigel Slack et al. (2001, pp.482&483) cited that
10、 the difference between traditional approaches and JIT approach to manufacturing can be discovered obviously through contrast of the two manufacturing systems in Figure 1. The traditional approach will place the components it produces in an inventory which buffers that stage from the next one downst
11、ream in the process. And then, the next stage down will take the parts from the inventory sooner or later, process them, and pass them deliver to the next buffer inventory. These buffers are here to isolate each stage from its neighbours, in order to making each stage relatively independent so that
12、if, for instance, stage A stops processing for some reason, stage B still can continue for a time. So the lager the buffer inventory, the less is the interruption caused when the problems occur. Consequently, it has to cost more budgets for the inventory and it caused slow throughput times which wil
13、l reduce the response time of customer, but it cannot ensure each stage to operate in an uninterrupted manner. Figure 1 Traditional and JIT flow between stages. (Nigel et al. 2001, p.483)The traditional approach in pursuit of encourages efficiency through protecting every single part of the process
14、from interruption. The JIT approach takes the contrary view.Through expose the system to problems makes them more evident and modifies the motivation structure of the system in order to solving the problems. The approach also allows an organisation to learn how to manage without surplus resources wh
15、ich could reduce the cost and eliminate waste. The idea of solving inventory problems is gradually lower the inventory exposes the worst of them problems which can be resolved, after the efficiency of operation improved, exposing more problems, and so on. Nigel et al. (2006, p.349) indicated that th
16、e ultimate purpose of JIT (also called lean operations) represents an ideal of smooth, undisrupted flow without delay, waste or imperfection of any circumstance.Nigel et al. (2001, pp.488&489) noted that the Just-in-time philosophy include three main component, in a short word, which are eliminate w
17、aste, involve everyone and continuous improvement (the core of JIT philosophy). As mentioned above, the inventory level could be continuous reduce which allows improve the total system sustainedly. In the JIT system, any interruption of a single stage will immediately affect the rest of the system,
18、therefore, JIT demanding a high standard in all of an operations performance. Nigel et al. (2001, p.484) pointed out that the objectives include:Quality must be high due to any error will disrupt the JIT process and slow the production rate.Speed fast enough to meet the demanding of the customer.Dep
19、endability is a prerequisite for fast throughput.Flexibility especially important for the purpose of achieve fast throughput and short delivery lead times.As the result of achieving above performance objectives, cost is reduced. JIT pursuit of low or zero inventory, therefore incoming goods and mate
20、rials are especially important. So the organisations which pursing JIT need to establish close and long term relationships with few suppliers, and establishment of an interconnection in the vendor - consumer relationship.The Advantages of JITAs explained at above section, JIT approach allows organis
21、ations reducing the inventory as lower as possible. Thus, there are several advantages within food and beverage business by the implementation of JIT (lean) operations.In the 1930s Colonel Sanders, as we known, the founder of the Kentucky Fried Chicken Corporation, unravelled the operational problem
22、 of efficiency (waiting time) and enhanced quality by using a vegetable pressure cooker to fry chickens. Nowadays, the fast food sector lies in the decrease in preparation time as a way of reducing labour cost (Kimes et al., 1999). Svetlana (2008) noted according to Davis et al. (2002) asserted that
23、 there are two major types of process design are used within fast food industry: make-to-stock, as in McDonalds and assemble-to-order by using work-in-process inventory, as in Burger King. As a kind of JIT operation, the Burger King got the lower inventory level which allows re-utilised storage spac
24、e. It is one of the key benefits of Just-in-time, re-utilised the storage space to improve other sections. Another obviously benefit of JIT is reducing the costs of holding stocks, which also through using work-in-progress to reduce the storing. There is no need for any large warehouse and storage f
25、or stock. With work-in-process inventory keeps at a minimum level, production can respond quickly to missteps and changes in demand. Throughput time is reduced with non-value-added activities like wait, move, and inspection time, which can sum up to 95% of product costs. (Foster & Homgren, 1987) The
26、oretically, JIT improves staffs participation and deliveries a greater sense of responsibility and ownership of work by using their input in decision making and expanding their workplace skills. Most of the principles and techniques of just-in-time, although they have been described as a sector of m
27、anufacturing operations, are also applicable to service sector (Nigel, 2001). For example, the role of inventory in manufacturing system likes exactly the same as the role of queue in service operation. So the inventory and queues have lots of similar characteristics, as follow:Inventory (queues of
28、material)Queues (queues of people)CostTies up capitalWaste timeSpaceNeeds warehouseNeed waiting areasQualityDefects are hiddenGive negative impressionDecouplingMakes stages independentPromote division of labour and specializationUtilizationStages kept busy by work-in-progressServers kept busy by wai
29、ting customerCoordinationAvoids having to synchronize flowAvoid having to match supply and demandTable.1 Inventory and queues have similar characteristicsSource: Nigel, S., Stuart, C., & Robert, J. 2001, p.501To sum up above in this section, in manufacturing operations sector, the key benefits of im
30、plementation JIT approach are reducing the costs of holding stocks, re-utilising the space of storage, reducing the stock wastage and improving response time to changing demands. On the other hands, the sector of service operation, the benefits are reducing the waste time, re-utilising the waiting a
31、reas, and improving the matching of supply and demands. And one benefits for both side, enhance the participation and motivation of staffs, making them more responsible for their work and broadening their abilities of workplace.The Limitations of JITWith reduced stock holdings, the organisation is a
32、t tremendous risk of supply chain disruption, therefore there are plenty of concealed crisis results in several limitations of JIT approach. There are two main sides of limitations of JIT. The first one is suppliers sector. The implementation of JIT requires a full evaluation of the organization in
33、order to obtain the data to forecast demand as accurately as possible, but one of the most difficult things in human life is forecast. Choose the right suppliers who are also committed to the JIT philosophy and must supply material punctually every single time. The suppliers are vitally important fo
34、r the organisation which implements the JIT approach, because any interruption in supply will result in immediate problems for the consumers. The organisations reputation is placed in the hands of other people which are external supplier. The supplier must select by certain criteria such as: close t
35、o production plant, well connected industrial relations and they will accomplishment what they promised. If there is irresistible accident occurred, nature disaster or accident beyond control such as heavy snow or car accident result in there is no supplies to maintain the regular production. There
36、are much more uncertainty factor will influence the supply chain of JIT system which hardly be controlled by human power. JIT system may also unable to deal with the sudden variations in demand. Due to the features of JIT system, it is relatively limited to solve the sudden event not only from exter
37、nal but also from internal. Heizer and Render (2006) noted that just-in-time inventory is the minimum stock necessary to maintain a perfect system running. The extra stock is used for cover problems or demanding. JIT inventory requires the exact amount of goods arrives at the moment it is needed, no
38、t before five second or after five seconds. Because of such strict time demanding, it is limited to achieve if the management is not well planed enough. Another major aspect of the limitations of JIT is staffs sector. Reduced cycle times, decreases slack, buffer, and idle time all places extra stres
39、ses on staffs (Luhring SurvivalWare, 2009). Under such stress the staffs will feel tired or cannot concentrate on their work. Some authors (Epps, 1995; Inman and Mehra, 1993; Spencer and Guide, 1995) indicated that staffs must be trained well to be able given authority to make day-to-day production
40、decisions in order to make them flexible and react appropriately. Thus such staffs are limited to obtain, but they are considered critical to the success of JIT. The effective of team working is also important for problem solving in a JIT environment (Rosemary and Cheryl, 2001). With this kind of pe
41、rfect flow process, the good managers are rare and limited. And if the process disrupted the lost will be enormous.ConclusionThe fundamental philosophy behind JIT both in manufacturing and service operations could be summarized as a uniquely organized set of activities which can be utilized to deliv
42、ery low cost and high quality products and services (Canel, Rosen & Anderson, 2000). The discussion presented in this paper highlights the advantages and limitations of inventory control within food and beverage industry by the implementation of Just-in-time philosophy (which also called lean operat
43、ions). The global competition is forcing organisations to improve the productivity and quality of their products and their services as well. At the mean time reduce the cost of the operations. This is a vital demanding for maintaining competitiveness. The concepts of JIT were discussed and the philo
44、sophy of JIT brings the advantages of this approach, but carries out some limitations of the approach as well. It is wisely implement the JIT concepts in organisations, allows reducing the costs of holding stocks, re-utilising the storage space, reducing the stock wastage, improving response time to
45、 changing demands and continuously enhancing the productivity and lower the cost. The major limitations of JIT are from two sectors, suppliers and staffs. It is essential to corporate with a few trusted long-term suppliers. And training the staffs also is very important. Of course, it is needed a go
46、od manager and forecast correctly. Through the research for this paper, there is a clearly truth which is JIT approach will help the organisations making more money.ReferenceBeasley, J.E. Just-in-time (JIT) http:/people.brunel.ac.uk/mastjjb/jeb/or/jit.html-accessed on 11/01/2010Canel, C., Rosen, D.
47、& Anderson, A.E. (2000) Just-in-time is not just for manufacturing: a service perspective. Industrial Management & Data Systems. Vol. 100, No.2, pp.51-60 i.p. 9Davis, M., Aquilino, J., Chase, R. (2002) Fundamentals of Operations Management. McGraw-Hill, New York, USA. i.p. 5Epps, R.W. (1995) Just-in
48、-time inventory management: implementation of a successful program. Review of Business. Vol. 17, No.1, pp. 40-44 i.p. 8Foster, G., Horngren, C.T. (1987) JIT: cost accounting and cost management issues. Management Accounting. Vol. 6, pp. 19-25 i.p. 5Heizer, J., Render, B. (2006) Principles of Operati
49、ons management. Sixth Edition, Pearson Education. New Jersey, USA i.p. 8Inman, R.A. & Mehra, S. (1993) International Journal of Operations and Production. Management Financial justification of JIT implementation. Vol.13, No.4, pp. 32-39 i.p. 8Kimes, S.E., Barrash, D.I., Alexander, J.E. (1999) Developing a restaurant revenue-management strategy. Corn