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Just-in-time also known as JIT is an inventory management method whereby labour, material and goods (to be used in manufacturing) are re-filled or scheduled to arrive exactly when needed in the manufacturing process.
JIT approach has the capacity, when adequately applied to the organisation, to improve the competitiveness of the organisation in the market significantly by minimizing wastes and improving production efficiency and product quality.
JIT is a manufacturing management process. It was first developed and applied in the Toyota manufacturing plants in order to meet consumer demands with minimum delays.
Taiichi Ohno of Japan is referred to as the father of Just In Time. Toyota met the increasing challenges for survival through a management approach that was entirely focused on people, systems and plants.
Toyota realised the Just In Time approach would only be successful if every person within the Toyota was committed and involved in it, and if plant and processes were properly arranged for maximum efficiency and output, and if the quality of the goods produced and production programs were scheduled to meet demands exactly.
The main focus of JIT is to identify and correct the obstacles in the production process. It shows the hidden problems of inventory. The prime objective of JIT is to increase the inventory turnover and reduce the holding and all connected cost.
Just In Time method prevents a company from using excessive inventory and smoothens production operations if a specific task takes longer than expected or a defective part is discovered in the system. This is also one of the main reason why the companies (which are opted for JIT) invest in preventive maintenance; when a part/equipment breaks down, the entire production process stops.
This concept was made applicable again by the Japanese firms, placing an order for the material, the same day of the production of the product. The Just In Time approach eliminates the requirement to carry voluminous inventories and incur heavy carrying other related costs to the manufacturer.
In order to avail the benefits of JIT system, there should be an optimum synchronization between the manufacturing cycle and delivery of material. Just In Times requires a good understanding of the supplier and the manufacturer in terms of the quantity and delivery of the material. In the event of any misunderstanding between the manufacturer and supplier of the material, the entire production process may come to a halt.
One example of a JIT system is a car manufacturer, a manufacturer of cars operates with bare minimum inventory levels, as there is a strong reliance on the supply chain to deliver the parts required to manufacture cars. The parts required in the manufacturing of cars do not arrive before or after they are needed; rather, they arrive only when they are needed.
Successful JIT implementation wholly depends on how the manufacturer manages its suppliers. A lot of pressure is exerted on them, as the supplier of the materials have to be ready with ample quality material, as the need arises.
There are seven types of waste:
Waste minimization is one of the primary objectives of the Just In Time system. This needs effective inventory management throughout the whole supply chain.
Initially, a manufacturing entity will seek to reduce inventory and enhance operations within its own organization. In an attempt to reduce waste attributed to ineffective inventory management, SIX principles in relation to JIT have been stated by Schniededans and they are: