Final answer:
Just-In-Time (JIT) production and Ashby's law prioritize reducing inventory to only what is necessary, with suppliers located close to the assembly plants for daily deliveries. This system enhances quality control and efficiency, contrasting with traditional inventory practices like maintaining safety stocks or increasing levels based on trends.
Step-by-step explanation:
Just-In-Time (JIT) / Lean Production and Ashby's law both focus on efficiency and responsiveness in production processes. JIT, as a strategy, focuses on reducing inventory to the minimum necessary for production, aligning with Ashby's law which states that a system must be as flexible as the environment it operates in. In this context, maintaining a large inventory would go against the principles of JIT, which emphasizes having parts delivered exactly when they're needed to minimize storage and reduce waste.
Companies like Honda implemented JIT in the 1980s, leading to a supply chain where parts are delivered daily, fostering better quality control and more efficient use of resources. This method also requires suppliers to be located within a day's drive to the main assembly plant, ensuring the timely delivery of components. With JIT, the emphasis is not on maintaining maximum inventory levels for safety but rather on optimizing the flow of goods to be available 'just in time'.
This approach contrasts with traditional methods that might suggest continuously increasing inventory based on market trends or maintaining it at maximum levels considering safety stock. Instead, JIT and Lean Production practices guide firms to focus on cost efficiency and reduction of waste, much in the spirit of achieving economies of scale where larger output decreases the cost per unit, yet without overproducing or holding excessive inventories.