CIM Lean Inventory & JIT Systems 5 — Questions and Answers
Question 1: In a lean supply chain, 'milk run' logistics refers to:
- Delivering dairy products to minimize cold-chain inventory
- A scheduled route where a carrier picks up small loads from multiple suppliers in one trip (Correct answer)
- A daily cycle-count procedure for perishable inventory
- A pull-based replenishment system triggered by consumption
Correct answer: A scheduled route where a carrier picks up small loads from multiple suppliers in one trip
Milk run routes consolidate frequent small pickups from multiple suppliers, enabling JIT delivery without full truckload minimums.
Question 2: Which lean metric measures the percentage of time a process is actually adding value versus total elapsed time?
- Overall Equipment Effectiveness (OEE)
- Process cycle efficiency (value-added time ÷ total lead time) (Correct answer)
- Inventory turnover ratio
- First-pass yield
Correct answer: Process cycle efficiency (value-added time ÷ total lead time)
Process cycle efficiency exposes how little of the total lead time actually adds value, revealing the opportunity lean improvements can capture.
Question 3: A lean team identifies 'overprocessing' waste in their inspection department. What does this mean?
- Too many inspectors causing labor cost overruns
- Performing more inspection steps or checks than the customer requires or defects justify (Correct answer)
- Processing orders before they are officially released
- Running production equipment at higher speed than designed
Correct answer: Performing more inspection steps or checks than the customer requires or defects justify
Overprocessing waste occurs when work exceeds what the customer values, consuming time and resources that do not increase product worth.
Question 4: What is the primary inventory implication of using a 'fixed-time, variable-quantity' replenishment system versus a JIT pull system?
- Fixed-time systems eliminate safety stock; JIT systems require it
- Fixed-time systems require safety stock to cover demand variability between orders; JIT pull systems replenish based on actual consumption (Correct answer)
- Both systems result in identical average inventory levels
- JIT pull systems require larger lot sizes to justify frequent deliveries
Correct answer: Fixed-time systems require safety stock to cover demand variability between orders; JIT pull systems replenish based on actual consumption
Fixed-time systems must hold safety stock for the entire review period plus lead time, while pure pull systems replenish as actual demand occurs.
Question 5: A manufacturer adopts lean and reduces its average inventory from 30 days to 8 days of supply. Which financial statement impact is most direct?
- Reduced depreciation expense on the income statement
- Reduced current assets on the balance sheet, freeing working capital (Correct answer)
- Increased revenue from faster order fulfillment
- Reduced cost of goods sold from lower purchase prices
Correct answer: Reduced current assets on the balance sheet, freeing working capital
Lower inventory directly reduces current assets, releasing working capital that can be redeployed to other investments.
Question 6: Which condition makes JIT implementation most challenging in a manufacturing environment?
- High product demand with stable, predictable volume
- Geographically distant suppliers with long and variable lead times (Correct answer)
- Standardized components shared across multiple product lines
- High production volumes that justify dedicated production lines
Correct answer: Geographically distant suppliers with long and variable lead times
Long, unreliable lead times force companies to hold large safety stocks that undermine JIT's goal of minimal inventory.
Question 7: What is 'kaizen blitz' (also called a kaizen event) in lean inventory management?
- A rapid, focused improvement workshop where a cross-functional team implements changes to a process within days (Correct answer)
- An emergency response plan triggered when inventory falls below safety stock
- A daily stand-up meeting to review production metrics
- A software-driven optimization of reorder points and quantities
Correct answer: A rapid, focused improvement workshop where a cross-functional team implements changes to a process within days
A kaizen blitz concentrates a team's effort on one problem area for 3-5 days, enabling rapid, concrete improvements rather than slow committee-driven change.
CIM Lean Inventory & JIT Systems 5
In a lean supply chain, 'milk run' logistics refers to: