Business Process Management Essay

1846 words - 7 pages

Business Process Management (BPM) is a method of controlling the processes in an organisation . BPM is utilised to ensure that an organisation is run as effective and efficient as possible with regards to costs profitability and production. BPM should be continuously monitored on an on-going basis. Methods of BPM include Total Quality Management (TQM), Cost of Quality Report (COQ) and Just-In-Time (JIT).

Just-In-Time (JIT) manufacturing is producing the required items, of the right quality, and in the exact quantities, precisely as they are needed (Minahan, 1997) . JIT “is a management philosophy focused on how the supply chain fits into the manufacturing process” (Greb, 2009) . JIT manufacturing focuses on reducing inventory held and the costs associated with holding inventory and increasing the quality of the products. JIT relies on close links between the manufacturer and its suppliers and also assumes that there will not be an unforeseen large increase in demand. Schonberger writes that “ The characteristics of JIT purchasing are few suppliers, nearby suppliers, frequent deliveries in small lot quantities, long term contract agreements and close relationships between buyers and suppliers” (Schonberger, 1983) Companies such as Dell, Harley Davidson, Toyota, Xerox and Hewlett Packard have all implemented some form of JIT.
JIT can result in lower costs associated with holding stock, an increase in floor space available, an increase in quality and reduction in deliver time to customers, which may lead to an increased level of customer satisfaction which in turn will lead to higher orders and a higher demand for products. However JIT is not suitable for all firms or industries and should only be implemented after serious consideration. “JIT probably creates more problems than it solves when it is inappropriately applied” (Hall, 1989) .
Toyota is “cited as the founder of the JIT manufacturing system and continues to be one of the concepts leading practitioners” (Minahan, 1997) . JIT refers to items in the philosophy of the Toyota Company such as reduction of waste, continuous improvement, quality and customer satisfaction (Cheng and Podolsky, 1996) . Toyota is seeking to continually improve its manufacturing process and as a result has adapted slightly different JIT procedures in each of its plants to achieve the highest results possible. Toyota has established very close links with its suppliers and as a result negotiates with its suppliers “to lock quality into the system”. Toyota uses suppliers based close to the assembly plants wherever possible and as a result only holds 2.8 hours’ worth of parts inventory at the plant. Consequently about 250 deliveries arrive daily at the plant in Georgetown alone. JIT has benefits for the suppliers also and in a 2008 study Liao finds that “the supply chain integration, JIT purchasing and JIT manufacturing in the Toyota production system in Taiwan carry direct and significant benefits for suppliers’...

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