Final answer:
Manufacturers utilize strategies like safety stock, inventory control, just-in-time production, and lead time management to meet customer demands. Of these, just-in-time production minimizes storage costs and inventory size by delivering parts only as needed for production.
Step-by-step explanation:
Manufacturers use different strategies to ensure they always have enough products to meet customer demands. These strategies include:
- Safety stock: An additional quantity of an item held in the inventory to reduce the risk that the item will be out of stock.
- Inventory control: The supervision of supply, storage, and accessibility of items to ensure an adequate supply without excessive oversupply.
- Just-in-time production: A strategy to improve a business's return on investment by reducing in-process inventory and associated carrying costs.
- Lead time management: The process of planning, scheduling, and controlling the time between ordering and receiving goods.
Among these, just-in-time production is particularly notable. Originating in Japan, it involves the delivery of parts and materials just as they are needed, minimizing storage costs and reducing the risk of carrying large inventories. However, it requires a high level of coordination and reliability in the supply chain. Notably, in the 1980s, some American car manufacturers adopted this method, which resulted in a shift in their operational strategy and impacted the labor market and surrounding communities.