Just In Time (JIT)

Defination:
Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand.

OR

A philosophy of manufacturing based on planned elimination of all waste and on continues improvement of productivity.

Introduction:
The JIT was developed at the Toyota motor company of Japan by Taiichi Ohno (who evenly became vice president of manufacturing and several of his colleagues.) JIT basically develop in1950s, well establish in Japan in 1970s.Then JIT was adopted by US IN 1980s (General electric).

JIT used by company:

When Companies use Just in Time (JIT) manufacturing and inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases are zero. JIT approach can be used in both manufacturing and merchandising companies.

Benefits / Advantages of Just in Time Manufacturing System:

The main benefits of just in time manufacturing system are the following: Funds that were tied up in inventories can be used else where. Areas previously used, to store inventories can be used for other more productive uses. Through put time is reduced, resulting in greater potential output and quicker response to customers. Defect rates are reduced, resulting in less waste and greater customer satisfaction. Materials Cost Savings Manufacturing Cost Savings Sales Cost Savings.

Real Business Examples:

Del Computer Corporation has finally tuned its Just-in-Time system so that an order for a customized personal computer that comes in over the internet at 9 AM. can be on a delivery truck to the customer by 9 P.M. In addition, Dell's low cost production system allows it to under price its rivals by 10% to 15

Disadvantages of Just in Time Manufacturing System:

Implementing thorough JIT procedures can involve a major overhaul of your business systems - it may be difficult and expensive to introduce. JIT manufacturing also opens businesses to a number of risks, notably those associated with your supply chain. With no stocks to fall back on, a minor disruption in supplies to your business from just one supplier could force production to cease at very short notice.

Real Business Example:

Just-in-time manufacturing system has many advantages, but they are vulnerable to unexpected disruptions in supply. A production line can quickly come to a halt if essential parts are unavailable. Toyota, the developer of JIT, found this out the hard way. One Saturday, a fire at Aisin seiki Company's plant in Aichi Prefecture stopped the delivery of all break parts to Toyota. By Tuesday, Toyota had to close down all of its Japanese assembly line. By the time the supply of break parts had been restored, Toyota had lost an estimated $15 billion in sales.

List of Companies that use just in time (JIT):

Toyota Motor Company General Motors Ford Motor Company Manufacturing Magic Hawthorne Management Consulting

How Just-In-Time Systems Work

But the main requirements are organizational commitment to the companys internal structures related to JIT techniques, and customer and supplier support systems. Firm-wide commitment and knowledgeable management run hand in hand because first you need knowledgeable management to have firm-wide commitment. The management must be able to teach the employees about JIT and support the effort completely. They must know everything about JIT so that they can inform everyone of what is going on at all times

Requirements for JIT:

Respond to Customer Requirements Integrate all Processes in the Manufacturing System Employee Participation in Meeting Commitments Company wide Commitment to education Eliminate redundancy Reduce all Inventory Establish Continuous Improvement Goals Design products for Manufacturing Develop Controllable Production Processes Reduce Setup Times

Central Themes Surrounding Just-In-Time:

Simplicity Quality Elimination of Waste