Just in Time (JIT)

Just-in-time manufacturing is a strategy used in the business manufacturing process to reduce costs by reducing the in-process inventory level. It is driven by a series of signals that tell the production line to make the next piece for the product as and when it is needed. The signals used are usually simple visual signals, such as the absence or presence of a piece needed in the manufacturing process.

Just-in-time manufacturing can lead to huge improvements in quality and efficiency. It can also lead to higher profits and a larger return in investment. A reorder level is set and new stock is ordered when that level is reached. There is no overstocking of parts. This saves on space in the warehouse.

Just-in-time manufacturing was first used by Henry Ford of the Ford Motor Company. Ford only bought materials for his immediate needs in the manufacturing process. He bought only the amount of material needed to fit into his plan of production. He planned transportation of materials so the flow of his product would be smooth. This gave him a rapid turnover and decreased the amount of money tied up in raw materials.

Ford's just-in-time manufacturing process was adopted by many other car manufacturer. Toyota in Japan used the process with very satisfactory results; huge amounts of cash appeared as in-production inventory was built and then sold. The response time on the factory floor fell to about a day. Customer satisfaction was higher, as vehicles could usually be provided within a day or two. Many vehicles were built to order, which reduced the threat that they would be built and not sold, thus eliminating another risk to business.

With just-in-time manufacturing, assemblers no longer have a choice of which parts to use; every part has to fit correctly. This means that multiple suppliers are usually eliminated from the process and quality assurance is higher. The parts used are all of the same quality, which means that line stops for quality checks are almost eradicated, leading to higher productivity rates. The just-in-time manufacturing philosophy has been applied to many industries and businesses with very successful results.

There seems to be only one problem with just-in-time manufacturing, and that is that the whole process lies in historical demand. Manufacturers need to gauge the levels of materials and parts needed from their past or current sales figures. If there is a rise or fall in demand for the product, it could have serious effects on the inventory process. Manufacturers have to make sure they have a sales forecast or reference in place to allow for these fluctuations in sales. If they do not have these figures, it could cause a serious.

                                           

Some Key Elements of JIT:

1. Stabilize and level the MPS with uniform plant loading (heijunka in Japanese)

2. Reduce or eliminate setup times: aim for single digit setup times (less than 10 minutes)

3. Reduce lot sizes (manufacturing and purchase)

4. Reduce lead times (production and delivery)

5. Preventive maintenance

6. Flexible work force

7. Require supplier quality assurance and implement a zero defects quality program

8. Small‑lot (single unit) conveyance