Final answer:
Contrary to the assertion that a JIT/lean system is not effective with a tiered supplier network, JIT can improve efficiency and quality control, despite potential supply chain risks. With proper management, JIT can still function effectively within such a network, encouraging competition among suppliers to improve their services and reduce costs.
Step-by-step explanation:
The assertion that a JIT/lean system is not effective when the industry consists of a tiered supplier network is false. JIT, or just-in-time, is a production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. The practice involves parts and materials being delivered just in time to go on the assembly line, which can indeed function within a tiered supplier network. This strategy necessitates close coordination and reliable communication among all levels of the supply chain, from suppliers of raw materials to the final assembly plants .In terms of the tiered supplier network, complexities do arise, such as increased risk of supply chain disruption if any supplier faces problems, such as a labor strike or a failure to deliver quality parts on time. However, the effectiveness of a JIT/lean system shouldn't necessarily be discounted because of this. In fact, JIT systems can encourage suppliers to compete for contracts and improve their efficiency and reliability, promoting better quality control and potentially reducing the costs associated with carrying large inventories. Companies employing a JIT strategy may choose suppliers located within geographical proximity to the assembly plants to ensure quick and reliable delivery. While challenges do exist, such as potential disruptions due to labor strikes or international trade issues, with the correct management and business relationships, a JIT/lean system can be highly effective within a tiered supplier network.