Northern Tractor is a manufacturer of commercial and consumer garden tractors. In its 30 years of operation, Northern has followed a traditional manufacturing process that included maintaining a significant raw material inventory. In an effort to streamline the manufacturing process and reduce inventory carrying costs, Northern’s CEO wants to switch to a JIT manufacturing process. Production consultants have informed the CEO that moving to JIT will require a new philosophy; one aspect of this is moving toward zero-defect manufacturing. Under this philosophy, if a defective part from an out-of-control process is detected, no more units should be produced until the process is corrected. The consultants estimate that the production process may occasionally be shut down anywhere from 30 minutes to several hours. Discuss the advantages and disadvantages of this new approach.
