Question

A supplier provides parts to a manufacturing company that demands JIT deliveries. At the present time it takes 6 hours to make a round-trip between the supplier's warehouse and the customer, including loading, travel and unloading time. The lot size is 12 pallet loads on a truck, and the manufacturer uses 2 pallets per hour. 1. How many trucks are needed to ship the pallets to the manufacturer? 2. What is likely to happen if the trucks break down? 3. How can the supplier ensure that the customer does not run out of parts even in the face of delivery problems or other uncertainties? 4. What will happen if the manufacturer runs into trouble and shuts down for a period of 6 hours? 5. If unexpected overtime is required, how do you effectively communicate the need to your workforce?

Answer 1

1. Consumption of the pallets = 2 per hour

Pallets on truck =12

Number of hours taken to consume a truck's material = 12/2 =6 hours.

This is exactly the time which a truck would tak to come back doing a round trip.

In ideal conditions where the consumption rate always remains constant and the trucks never get late, only one truck can do the duty and meet the needs.

2. If there is only one truck and it breaks down, it would lead to delay and the customer's process would be halted till the breakdown is corrected.

3. Supplier can keep one spare vehicle ready ( it need not be purchased but should be available for hire on short notice, for which arrangements can be made with providers), which would take  three -four hours to reach the customer which needs to keep few pallets as buffer, so as to serve the need and  that the delays or small breakdowns don't affect the process. This buffer stock would not incur much cost, and can be determined by assessment of the variaibility of process.

4. If the manufacturer stops for 6 hours, there will be 12 pallets already lying at its premises when the next delivery comes up. If the process continues steadily as usual, the manufacturer would need to have a space to store 12 surplus pallets.