| Peer-Reviewed

Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers

Received: 14 May 2013     Published: 30 June 2013
Views:       Downloads:
Abstract

In many organisations, Just-In-Time (JIT) implementation plays a significant role in minimizing their excessive costs, and increasing their efficiency. However, the risks accompanying JIT strategies are often overlooked and affect system processes disrupting the entire chain of supply. This paper proposes an inventory model that can simultaneously reduce costs and risks in JIT systems. This model is developed in order to ascertain an optimal ordering strategy for procuring raw materials by using multi-external suppliers and local backup supplier to reduce the total cost of the products, and at the same time to reduce the risks associated with JIT supply within production systems. The effectiveness of the developed model is tested using an example problem with inbuilt disruption. A comparison between the cost of using the JIT system and using the inventory system shows the superiority of the use of the inventory policy.

Published in Automation, Control and Intelligent Systems (Volume 1, Issue 3)
DOI 10.11648/j.acis.20130103.12
Page(s) 42-52
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Lean Manufacturing, Just-In-Time (JIT), Production System, Cost-Risk Reduction, Inventory Model, External Supplier, Local Backup Supplier

References
[1] C. Canel and B. M. Khumawala, "International facilities location: a heuristic procedure for the dynamic uncapacitated problem," International Journal of Production Research, vol. 39, pp. 3975-4000, 2001.
[2] F. Abdullah, "Lean Manufacturing Tools and Techniques in the Process Industry with a Focus on Steel," PhD thesis, University of Pittsburgh, 2003.
[3] A. Badurdeen, "What is Lean Manufacturing?," 2006, [Online], http://www.learnleanblog.com/2006/12/what-is-lean-manufacturing.html [Accessed 07.11.2011].
[4] B. Fahimnia, R. Marian and B Motevallian, "Analysing the hindrances to the reduction of manufacturing lead-time and their associated environmental pollution, International Journal of Environmental Technology and Management (IJETM), ISSN 1466-2132, vol. 10, no. 1, pp. 16-25, 2009.
[5] Y. Monden, Japanese Cost Management. World Scientific, 2000.
[6] T. C. E. Cheng and S. Podolsky, "Just-in-time manufacturing: an introduction," New York, Chapman & Hall, 1996.
[7] R. A. Hokoma, M. K. Khan and K. Hussain, "The Present Status of Quality and Manufacturing Management Techniques and Philosophies within the Libyan Iron and Steel Industry," TQM Journal, vol. 22, no. 2, pp. 209-221, 2010.
[8] Z. X. Chen and B. R. Sarker, "Multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system," The Journal of the Operational Research Society, vol. 61, pp. 1654-1666, 2010.
[9] Y. Li, K. F. Man, K. S. Tang, S. Kwong and W. H. Ip, "Genetic algorithm to production planning and scheduling problems for manufacturing systems," Production Planning & Control, vol. 11, no. 5, pp. 443-458 , 2000.
[10] T. Tourki, "Implementation of Lean within the Cement Industry," PhD thesis, De Montfort University, 2010.
[11] L. Eldenburg, "Cost Management: Measuring Monitoring and Motivating Performance," John Wiley & Sons, 2007.
[12] J. S. Yang and J. C. H. Pan, "Just-in-Time Purchasing: an Integrated Inventory Model Involving Deterministic Variable Lead Time and Quality Improvement Investment," International Journal of Production Research, vol. 42, no. 5, pp. 853-863, 2004.
[13] B. Fahimnia, L. Luong and R. Marian, "An integrated model for the optimisation of a two-echelon supply network," Journal of Achievements in Materials and Manufacturing Engineering, vol. 31, pp. 477-484, 2008.
[14] A. Chae and H. Fromm, Supply Chain Management on Demand. Springer, 2005.
[15] R. A. Sarker and L. R. Khan, "An Optimal Batch Size for a Production System Operating under Periodic Delivery Policy," Computers & Industrial Engineering, vol. 37, pp. 711-730, 1999.
[16] M. C. Carneiro, G. P. Ribas and S. Hamacher, "Risk Management in the Oil Supply Chain: A CVaR Approach," Industrial & Engineering Chemistry Research, vol. 49, no. 7, pp. 3286-3294, 2010.
[17] N. Julka, R. Srinivasan and I. Karimi, "Agent-Based Supply Chain Management—1: Framework," Computers and Chemical Engineering, vol. 26, pp. 1755-1769, 2002.
[18] B. Tomlin, "Disruption-Management Strategies for Short Life-Cycle Products," NAVAL RESEARCH LOGISTICS, vol. 56, pp. 318-347, 2009.
[19] D. Simchi-Levi, L. Snyder and M. Watson, "Strategies for Uncertain Times. Supply chain Management Review," 2002, [Online]. http://www.lehigh.edu/~lvs2/Papers/SCMR.pdf [Accessed 06 November 2012].
[20] X. K. Dimakos and K. Aas, "Integrated Risk Modelling," Statistical Modelling, vol. 4, pp. 265-277, 2004.
[21] A. A. Gaivoronski, G. M. Sechi and P. Zuddas, "Balancing Cost-Risk in Management Optimization of Water Resource Systems under Uncertainty," Physics and Chemistry of the Earth, vol. 42-44, pp. 98-107, 2012.
[22] G. V.-H. Jose, "Modelling Risk and Innovation Management," Advances in Competitiveness Research, vol. 19, no. 3&4, pp. 45-57, 2011.
[23] F. El Dabee, R. Marian and Y. Amer, "An Optimisation Model for a Simultaneous Cost-Risk Reduction in Just-in-Time Systems," in the 11th Global Congress on Manufacturing and Management, GCMM2012, Auckland, New Zealand, 2012, pp. 190-201.
[24] D. Bogataj and M. Bogataj, "Measuring the Supply Chain Risk and Vulnerability in Frequency Space," International Journal of Production Economics, vol. 108, no. 1, pp. 291-301, 2007.
Cite This Article
  • APA Style

    Faraj El Dabee, Romeo Marian, Yousef Amer. (2013). Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers. Automation, Control and Intelligent Systems, 1(3), 42-52. https://doi.org/10.11648/j.acis.20130103.12

    Copy | Download

    ACS Style

    Faraj El Dabee; Romeo Marian; Yousef Amer. Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers. Autom. Control Intell. Syst. 2013, 1(3), 42-52. doi: 10.11648/j.acis.20130103.12

    Copy | Download

    AMA Style

    Faraj El Dabee, Romeo Marian, Yousef Amer. Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers. Autom Control Intell Syst. 2013;1(3):42-52. doi: 10.11648/j.acis.20130103.12

    Copy | Download

  • @article{10.11648/j.acis.20130103.12,
      author = {Faraj El Dabee and Romeo Marian and Yousef Amer},
      title = {Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers},
      journal = {Automation, Control and Intelligent Systems},
      volume = {1},
      number = {3},
      pages = {42-52},
      doi = {10.11648/j.acis.20130103.12},
      url = {https://doi.org/10.11648/j.acis.20130103.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.acis.20130103.12},
      abstract = {In many organisations, Just-In-Time (JIT) implementation plays a significant role in minimizing their excessive costs, and increasing their efficiency. However, the risks accompanying JIT strategies are often overlooked and affect system processes disrupting the entire chain of supply. This paper proposes an inventory model that can simultaneously reduce costs and risks in JIT systems. This model is developed in order to ascertain an optimal ordering strategy for procuring raw materials by using multi-external suppliers and local backup supplier to reduce the total cost of the products, and at the same time to reduce the risks associated with JIT supply within production systems. The effectiveness of the developed model is tested using an example problem with inbuilt disruption. A comparison between the cost of using the JIT system and using the inventory system shows the superiority of the use of the inventory policy.},
     year = {2013}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Development of a Model for Simultaneous Cost-Risks Reduction in JIT Systems Using Multi-External and Local Backup Suppliers
    AU  - Faraj El Dabee
    AU  - Romeo Marian
    AU  - Yousef Amer
    Y1  - 2013/06/30
    PY  - 2013
    N1  - https://doi.org/10.11648/j.acis.20130103.12
    DO  - 10.11648/j.acis.20130103.12
    T2  - Automation, Control and Intelligent Systems
    JF  - Automation, Control and Intelligent Systems
    JO  - Automation, Control and Intelligent Systems
    SP  - 42
    EP  - 52
    PB  - Science Publishing Group
    SN  - 2328-5591
    UR  - https://doi.org/10.11648/j.acis.20130103.12
    AB  - In many organisations, Just-In-Time (JIT) implementation plays a significant role in minimizing their excessive costs, and increasing their efficiency. However, the risks accompanying JIT strategies are often overlooked and affect system processes disrupting the entire chain of supply. This paper proposes an inventory model that can simultaneously reduce costs and risks in JIT systems. This model is developed in order to ascertain an optimal ordering strategy for procuring raw materials by using multi-external suppliers and local backup supplier to reduce the total cost of the products, and at the same time to reduce the risks associated with JIT supply within production systems. The effectiveness of the developed model is tested using an example problem with inbuilt disruption. A comparison between the cost of using the JIT system and using the inventory system shows the superiority of the use of the inventory policy.
    VL  - 1
    IS  - 3
    ER  - 

    Copy | Download

Author Information
  • School of Engineering, University of South Australia, South Australia, Australia

  • School of Engineering, University of South Australia, South Australia, Australia

  • School of Engineering, University of South Australia, South Australia, Australia

  • Sections