JIT And MRP: Heineken Lager Beer Essay

Question:

Discuss about the JIT and MRP for Heineken Lager Beer.

Answer:

Heineken

Heineken Lager Beer is considered as one of the pale lager beer which has 5% alcohol content and is produced by the Dutch brewing company (Heineken International) (Theheinekencompany.com 2017). They have a holistic approach to the sustainability and the company strategy focuses on the creating excellent value chain. Their supply chain is globally integrated so that there is an increase in the process efficiencies. The MRP (Materials Requirements Planning) approach is suitable for this company as this is the appropriate process for the manufacturing process (Segerstedt 2017). This system would ensure that the materials are available for production and the ready products are available to the customers. The supply chain process of the company comprises of the safety and compliance, service and performance, cost awareness and control, quality in everything and they have innovative supply chain operations (Focuspoint.listedcompany.com 2017). This process would also ensure that the lowest possible material in the store and there is minimal product levels in the store. The company would be able to plan all the manufacturing activities, purchasing activities and scheduling the delivery of the products (Bookbinder and Dilts 2016). The transportation as well as the inventory optimization is becoming tightly integrated in Heineken and hence MRP is the right approach. The MRP approach allows the manufacturing unit to inform the suppliers regarding their exact requirements, which would help in better planning as well as scheduling of the tasks (Segerstedt 2017). This would also help the company to build on their aims of sustainability and mitigate the risk processes involved.

Focus Point Holdings Berhad

Focus Point has a wide range of retail outlets in eye care and the company believes in focus stores or the concept stores (Focuspoint.listedcompany.com 2017). The company also has food products chain such as Komugi. The Group has achieved only 5% revenue growth and it has focused on the bakery business (Focuspoint.listedcompany.com 2017). The Just-in-Time approach (JIT) would be suitable for this company as there would be subsequent reduction in the inventory costs. This would also ensure that the company witnesses greater profit sharing and has more revenue generation. The JIT approach is an effective one because this process ensures that there is an increase of efficiency and there is a subsequent decrease in the amount of waste generated (Bookbinder and Dilts 2016). This process would ensure that the company would be able to avoid the wastes which are associated with the overproduction as well as excess inventory.

Focus Point has significant business contribution from the optical businesses; however, it has lower revenue generation from the franchise management business (Focuspoint.listedcompany.com 2017). This is due to the fact that there was lower royalty fee as a result of the lower sales in the retail outlets. Hence, this inventory management system demands that the materials would be produced only when there is demand, which would improve the retail sales of the company (Bookbinder and Dilts 2016). The JIT approach would help in curbing inventory costs and make greater profit.

References

Bookbinder, J.H. and Dilts, D., 2016. Logistics information systems in a Just-In-Time environment.

Focuspoint.listedcompany.com. (2017). Focus Point Holdings Bhd - Investor Relations: IR Home. [online] Available at: [Accessed 26 May 2017].

Segerstedt, A., 2017. Cover-Time Planning/Takt Planning: A technique for materials requirement and production planning. International Journal of Production Economics.

Theheinekencompany.com. (2017). The HEINEKEN Company - Age Gate. [online] Available at: [Accessed 26 May 2017].

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