Wal-Mart and J.I.T. Dalia Escalante Armando Tapia Blas Tenorio Constantinos Savvides Just in Time (J.I.T.) Definition: Anything that does not add value to the product, is WASTE!! Developed by Mr. Ohno, Vice-President of Manufacturing for Toyota (1960-1975) J.I.T. Philosophy has a direct effect in manufacturing, purchasing, manufacturing support & distribution activities. Just in Time (J.I.T.) Three important components of J.I.T. I. Waste elimination. II. Company’s attitude toward Quality. III. Employee Involvement Just in Time (J.I.T.) With successful implementation of J.I.T.: Company becomes more efficient Company develops a less wasteful manufacturing system Company will no longer be dependent on marketing & advertising as the only way to distinguish parts and capture market share. Company will be low-cost producers of parts. Company will be open new markets Wal-Mart World’s largest discount retailer offering a wide variety of general merchandise. Family apparel, health & beauty aids, household needs, electronics, toys, fabrics & crafts, lawn & garden, jewelry and shoes. Special departments: pharmacy, tire & lube express, garden center, McDonald’s, Vision Center, and one-hour photo. Wal-Mart Wal-Mart’s philosophy is “Every Day Low Price” developed by it’s founder Sam Walton. Sam Walton’s 3 basic beliefs the company was built on are: 1. Respect the individual 2. Service to Our Customers 3. Strive for Excellence Wal-Mart Milestones: 1962: First Wal-Mart in Roger, Arkansas opens 1970: Wal-Mart goes public on the N.Y.S.E. 1979: Annual sales top $1 billion dollars. 1988: First Super-center opens 1991: First international unit opens in Mexico City 1997: Wal-Mart becomes the #1 employer in U.S. 2002: Wal-Mart ranked #1 on the FORTUNE 500 2002: Wal-Mart has the biggest single day sales in history, $1.43 billion on the day after Thanksgiving. JIT in Wal-Mart Wal-Mart is known to be one of the best supply chain operators of all times By investing early and heavily in cutting- edge technology to identify and track sales. In 1979 Wal-Mart switches to a computerized inventory system that tracks individual items. JIT in Wal-Mart Wal-Mart is searching for and supporting better technology that promises to make its IT infrastructure more efficient. Radio frequency identification (RFID) microchips, for example, may replace bar codes and security tags with a combination technology that costs less money. This new wireless technology (smart tag system) if used will provide a more efficient product-tracking mechanism. JIT in Wal-Mart In 1983, Wal-Mart invested in point-of-sale terminals, which simultaneously rang up sales and tracked inventory deductions. Four years later, a massive satellite system linked all of the stores to company headquarters, giving Wal-Mart's centralized IT department real-time inventory data. JIT in Wal-Mart In 1996 Wal-Mart launches its e- commerce Web site. The E-business system is used to regularly communicate sales and inventory data from every store to thousands of suppliers and buyers, and deploy a private trading hub to consolidate its purchasing globally and bring suppliers online to bid on contracts-all part of a plan to lower costs and pass on savings. JIT in Wal-Mart Wal-Mart approached its suppliers as if they were partners. By implementing a collaborative planning, forecasting and replenishment (CPFR) program, Wal-Mart began a just-in-time inventory program that reduced carrying costs for both the retailer and its suppliers. JIT in Wal-Mart Wal-Mart has gotten very good at keeping stores optimally stocked. Being able to stock their shelves as soon as they get empty. Wal-Mart has almost no supply storage areas because its vendor managed, just in time inventory system, which makes suppliers responsible for delivering product when Wal-Mart needs it. Wal-Mart’s Red Bluff Distribution Center Three main goals of the D.C. 1. Safety 2. Quality 3. Productivity JIT in Red Bluff D.C. 1. Point of Sale (POS) 2. Auto Freight Identification (FID) 3. LXE System 4. Trailer Manifest System (TMS) Sorter 5. Efficient workplace Layout 6. Preventive Maintenance 7. E-Stop Wal-Mart’s Red Bluff Distribution Center Point of Sale (POS) EDI Bettonville Data Processing Labels Process freight Distribute Wal-Mart’s Red Bluff Distribution Center Auto Freight Identification (FID) Unix based operating system No more manual labor Cut middle jobs (paperwork, manual movement of cases) Efficient (reduce cycle time), productive and accurate Increase savings (ex. OHIO $1.2 million year) Wal-Mart’s Red Bluff Distribution Center LXE System Hand held computer terminal Transport information to main computer by radio waves Used by: truck gate, yard drivers, slotters, & shipping Basically identifies where freight is at all times Helps with researching and maintaining accuracy Wal-Mart’s Red Bluff Distribution Center Trailer Manifest System (TMS) Sorter Merge & Encode Photo Eyes read freight and divert to correct lane to be shipped Efficient & Cut Costs by simplifying the shipping process Wal-Mart’s Red Bluff Distribution Center Efficient workplace Layout Cases flow smoothly Cut lead time Preventive Maintenance TQM – equipment continuously inspected E-Stop Maintain quality & Safety Red Bluff Wal–Mart D.C Eliminates waste Maintains Safety, Quality & Productivity. Wal-Mart Results of J.I.T. 1. Increase performance 2. Reduce costs 3. Enhance manageability Wal-Mart Results of J.I.T. Increase performance 1. Reduced time needed to receive products 2. Shelves in the store were always full 3. Customers complaints concerning availability of products were eliminated Wal-Mart Results of J.I.T. Reduce Costs 1. Supplying costs decreased 2. Inventory costs decreased 3. Moving Costs and maintenance cost decreased Wal-Mart Results of J.I.T. Enhance Manageability 1. Real time reports 2. Accurate results 3. More solid information to base decisions on Walmart and J.I.T. Thank You for Listening!!!