Just in time
|Just in time|
Just in Time (JIT) is a production system that increases efficiency of a company by reducing inventory and eliminating costly and wasteful elements during production of goods at the right time to meet customer demand (T. Hill 1991, p. 218, K. Ficon 2001, p. 212).
The JIT system emerged from Asian automotive manufacturers and became prominent in the 1970s through Taichi Ohno at the Toyota Company; however, the beginning of the concept was first described in the United States by Henry Ford in the early 20th century and was used by companies such as 7-SEVEN where Taichi Ohno worked as a corporate vice president (K. Ficon 2001, p. 211).
JIT is a demand-pull system; therefore, increasing inventory suggest that there are some problems with managing production systems (Vademecum...1999, p. 161). According to the philosophy of JIT, there are no unnecessary inventories that generate additional cost for an organization. Materials used in production are ordered by management which decisions are based on sales forecasts. The control of inventory is regulated by the card system, called KANBAN that controls the movement of the materials in different stages of production (Nowoczesne...1996, p. 305).
The most important features of the system JIT (J. Coyle 2002, p. 125, Nowoczesne...1996, p. 305):
- To minimize excessive inventory by improving collaboration between an organization and its suppliers to enhance the stability. Suppliers must be located near close enough to reduce time between ordering and receiving necessary goods that are delivered in small, but frequent amounts,
- To deliver needed parts to every stage of production at the right time to minimize a necessity for stopping production lines that are divided into small factory units where the KANBAN system is used to meet JIT objectives and to improve the flow of information,
- To use simply, automatic machines to improve productivity and flexibility of the production,
- To educate employees, so that they are able to react in the proper way in case of any problems during production on every stage of the assembly line,
- To decrease lead time and wasteful resources such as: unused space, equipment downtime, the surplus of production or employees,
- To increase quality of the product by using rules of TQC (Total quality control) that place the responsibility of the quality on all employees who are directly involved in the production.
The implementation of JIT is not a simply process that require all employees' commitment in the continuous changes that must meet the new standards. The effective collaboration with suppliers also should be chosen carefully based on their cost, localization and the ability to deliver the necessary materials (K. Ficon 2001, p. 220). According to Japanese studies, companies that decided to implement JIT, were able to achieve significant results in relatively short time of 5 years by increasing the productivity, improving the quality of the products so that 90 percent products less were returned to a company, and the required space was reduced by 15 percent (K. Ficon 2001, p. 216).
Examples of Just in time
- Kanban System: Kanban is a Just in Time production strategy that seeks to reduce inventory levels and increase efficiency. This system uses signals, such as cards or signs, to alert workers when inventory needs to be replenished. This allows companies to minimize the amount of inventory they have on hand, reducing costs associated with storage and transportation.
- Cellular Manufacturing: This approach to manufacturing seeks to reduce inventory and waste by grouping machines together into cells that produce similar products. This allows for more efficient production as parts can easily be shifted between machines, reducing wait times and idle time.
- Statistical Process Control (SPC): SPC is a Just in Time strategy used to monitor the quality of products during the production process. This allows companies to quickly identify problems with quality control and take steps to correct them before they cause major delays or quality issues.
Advantages of Just in time
Just in Time (JIT) Production System offers many advantages to companies, such as:
- Lower inventory costs – JIT production reduces the need for inventory and storage, resulting in lower costs for holding and managing stock.
- Increased efficiency – JIT production focuses on eliminating waste and making the most efficient use of resources, resulting in increased efficiency.
- Reduced lead time – JIT production reduces the lead time from ordering to delivery, resulting in faster turnaround time for customers.
- Improved quality – JIT production helps to reduce errors and defects, resulting in improved product quality.
- Increased flexibility – JIT production allows for quick changes in production, resulting in increased flexibility for companies.
Limitations of Just in time
Just in Time (JIT) production system offers many advantages to a company, but it also has some limitations. These include:
- High Dependence on Suppliers: JIT production system relies on a continuous supply of the right materials at the right time. If the supplier cannot provide a consistent supply, the process will be hindered.
- Costly Set-up: Setting up the JIT production system requires a significant investment in terms of time and resources.
- Difficulty in Forecasting: Accurately forecasting customer demand is difficult and can be costly to the company.
- Risk of Stockouts: JIT production system eliminates the need for large inventories and instead relies on quick deliveries to meet customer demand. However, if a supplier is unable to meet the demand, the company might face stockouts.
- Low Flexibility: JIT production system requires a high degree of coordination between the supplier and the company and it is not as flexible as other production systems.
- Difficulty in Adapting to Changes: If the customer demand or other factors change, JIT production system might not be able to accommodate the changes quickly.
To further improve production efficiency, there are a number of approaches related to Just in Time that can be used. These include:
- Total Quality Management (TQM): This approach to production focuses on improving the quality of the goods produced by focusing on customer needs, creating a process-oriented system, implementing feedback systems, and emphasizing continuous improvement.
- Lean Manufacturing: This approach to production seeks to reduce waste by streamlining the production process, eliminating redundant activities, and creating a standardized system for production.
- Six Sigma: This approach to production focuses on improving quality in the production process by increasing the accuracy and precision of the production process, reducing defects, and minimizing variation.
- Kaizen: This approach to production focuses on continuous improvement by encouraging employees to identify and address production problems, and to suggest improvements to the production process.
In summary, Just in Time is an important production system that seeks to increase efficiency by reducing inventory and eliminating wasteful elements during production. There are many other approaches related to Just in Time that can help improve production efficiency, such as Total Quality Management, Lean Manufacturing, Six Sigma, and Kaizen.
- Davenport, T. H., & Glaser, J. (2002). Just-in-time delivery comes to knowledge management. Harvard business review, 80(7), 107-11.
Author: Marek Dziuba