(Solution Download) 1 Identify the pros and cons of a JIT relationship


1. Identify the pros and cons of a JIT relationship from a supplier?s point of view.
2. Identify the pros and cons of a JIT relationship from a buyer?s point of view.
3. What factors should Dixon and D&S consider before making a decision on this relationship?

Dixon Audio Systems had developed a reputation as a leading producer of speakers, audio systems, and car stereos. Dixon accomplished this through creating strict organizational quality standards and demanding these same standards of its suppliers. Meeting quality standards was critical, particularly of plastic component parts. These parts were sourced from a number of vendors and required considerable experience and skill to make. However, as Dixon?s quality standards increased, the number of defective components returned to vendors increased too. This was increasingly holding up production and costing the company in excess inventory and unmet orders.
Dixon?s director of purchasing proposed a new approach to dealing with the vendor quality problem. She proposed that they develop a new arrangement with their top vendor of plastic components, D&S Plastics. Under the relationship, D&S Plastics would become Dixon?s JIT supplier. The arrangement would require D&S to station a full-time representative at Dixon?s headquarters.

 







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