Just In Time (JIT) is an inventory strategy implemented to improve the
return on investment of a business by
reducing in process inventory and its
associated carrying costs. JIT fits well
under the TQM umbrella, for many of the
ideas and techniques are very similar
and, moreover, JIT will not work without
TQM in operation. Writing down a
definition of JIT for all types of
organization is extremely difficult,
because the range of products, services
and organization structures leads to
different impressions of the nature and
scope of JIT. It is essentially:
A series of operating concepts that allows
systematic identification of operational
A series of technology-based tools for correcting
problems following their identification.
An important outcome of JIT is a disciplined program for improving
productivity and reducing waste. This
program leads to cost-effective
production or operation and delivery of
only the required goods or services, in
the correct quantity, at the right time
The process is driven by a series of
signals, which can be Kanban, that tell
production processes when to make the
next part. Kanban are usually 'tickets'
but can be simple visual signals, such
as the presence or absence of a part on
a shelf. When implemented correctly, JIT
can lead to dramatic improvements in a
manufacturing organization's return on
investment, quality, and efficiency.
Aims of JIT:
The fundamental aims of JIT are to produce or operate to meet the
requirements of the customer exactly,
without waste, immediately on demand. In
some manufacturing companies JIT has
been introduced as ‘continuous flow
production’, which describes very well
the objective of achieving conversion of
purchased material or service receipt to
delivery, i.e. from supplier to
customer. If this extends into the
supplier and customer chains, all
operating with JIT a perfectly
continuous flow of material, information
or service will be achieved. JIT may be
used in non-manufacturing, in
administration areas, for example, by
using external standards as reference
The JIT concepts identify operational problems by tracking the following:
1 Material movement – When material stops, diverts or turns
backwards, these always correlate with
an aberration in the ‘process’.
2 Material accumulations – These are there as a buffer for
problems, excessive variability, etc.
3 Process flexibility – An absolute necessity for flexible
operation and design.
4 Value-added efforts – Where much of what is done does not
add value, the customer will not pay for
The operation of JIT:
The tools to carry out the monitoring required are familiar
quality and operations management
methods, such as:
Process study and analysis.
Plant layout methods.
Statistical process control.
Value analysis and value engineering.
But some techniques are more directly associated with the
operation of JIT systems:
1. Batch or lot size reduction.
2. Flexible workforce.
3. Kanban or cards with material visibility.
6. Set-up time reduction.
7. Standardized containers.
In addition, joint development programs with suppliers and
customers will be required to establish
long-term relationships and develop
single sourcing arrangements that
provide frequent deliveries in small
quantities. These can only be achieved
through close communications and
meaningful certified quality.
Advantages of JIT:
Lower stock holding means a reduction in storage space which
saves rent and insurance costs
As stock is only obtained when it is needed, less working
capital is tied up in stock
There is less likelihood of stock perishing, becoming
obsolete or out of date
Avoids the build-up of unsold finished product that can occur
with sudden changes in demand
Less time is spent on checking and re-working the product of
others as the emphasis is on getting the
work right first time
Disadvantages of JIT:
There is little room for mistakes as minimal stock is kept
for re-working faulty product
Production is very reliant on suppliers and if stock is not
delivered on time, the whole production
schedule can be delayed
There is no spare finished product available to meet
unexpected orders, because all product
is made to meet actual orders.
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