Final answer:
The assertion that JIT/lean systems have a greater reliance on work-in-process inventory is false; these systems are designed to minimize all types of inventory, including both work-in-process and finished goods, to reduce costs and increase efficiency.
Step-by-step explanation:
The statement that JIT/lean systems minimize finished product inventory but have a greater reliance on work-in-process inventory is False. JIT (Just-In-Time) and lean systems aim to minimize inventory levels in all forms, including work-in-process (WIP) and finished goods. By having parts delivered daily and aligning production schedules closely with demand, these systems reduce the need for both WIP and finished products to sit in storage, thereby decreasing the amount of inventory held and reducing associated holding costs.
With just-in-time delivery, companies like Honda receive parts for assembly on an as-needed basis, thus eliminating the need for large storage areas and reducing the number of warehousing jobs. This system ensures that any quality issues are detected swiftly, preventing the accumulation of defective parts and promoting strong supplier quality controls. However, it necessitates suppliers to be located within close proximity to the assembly plants to facilitate the timely delivery of parts.