Just in time production strategies

 http://www.entrepreneur.com/article/40850

This article elaborates on how switching from a traditional manufacturing system to a just in time manufacturing model can change the future of your business. We learn about how Gamblin Artist’s oil colors went about this change this and what benefits were reaped. This particular business was a small one, owned by a husband and wife. As their business continued to grow they came into the common problem of having too much of their money tied up in their inventory. This was preventing them from expanding. Most manufacturing companies charge over 200 an hour, and that was a cost that a small business simply could not afford. Fortunately companies such as Oregon Manufacturing Extension Program (OMEP) cater to small business such as these utilizing state, local and federal funding to subsidize the cost. The Gamblins used to make colors in batches of 1,200 tubes of paint at a time, which would remain on the shelves as inventory for three to six months. Now the Gamblins make colors in smaller batches-about 500 tubes-and they focus on producing a single type of color at a time, like different kinds of red all made on the same day. Many small businesses don’t realize that they need a manufacturing philosophy. It increases creativity and flexibility by reducing variation. After implementing new manufacturing strategies, the Gamblins cut their inventory in half and freed up about $200,000 in cash, which they’ll use to invest in capital growth and launch their first advertising campaign. Their transition definitely turned out to be a success.

Questions

Do you think just in time manufacturing is better for small businesses or large businesses?

What are some negative outcomes that can result from moving to just in time manufacturing?

What are some examples of businesses you know of that use this technique?