Just-in-Time (JIT) Manufacturing
Just-in-time is a process of providing products on demand. JIT allows some organizations applying its approach to operate more efficiently and at a lower cost.
What is Just-in-Time Manufacturing?
Just-in-time (JIT) manufacturing is a Japanese management philosophy applied in manufacturing; it involves having the right items of the right quality and quantity in the right place and at the right time.
Just-in-time management involves the application of old management ideas; however, their adaptation to the modern manufacturing firm is a relatively new practice.
Research has shown that the proper use of JIT manufacturing has resulted in increases in quality, productivity and efficiency, improved communication and decreases in costs and wastes.
From beginning as a method of reducing inventory levels, JIT has developed into a comprehensive management philosophy, which over the years has served as mechanism to eliminate waste in all its forms, improve product quality and production efficiency.
The main objectives of JIT are:
- to create a sustainable competitive advantage through a customer focus and delivering superior performance of both goods and/or services in terms of cost, service and quality;
- to continuously eliminate waste, improve product quality and production efficiency;
- to apply the concept of added value; its fundamental in analysis of processes from a JIT perspective, leading to focused process improvement where value-adding processes are optimized and non-value-adding processes are considered wasteful and are therefore minimized and preferably eliminated;
- to develop operations approach composed of three main types of element: people, plant and systems, which must be integrated and provide a structure for focused improvement;
- to promote a good understanding of current plant and operations, appropriate positive management attitude and organizational flexibility;and
- to achieve improved service offered to customers, more effective operations, improved working environment and lower costs.
The potential of gaining these benefits has made JIT become a very popular subject with many organizations paying close attention to it.
In response to an ever more competitive business environment, many worldwide organizations are considering and applying the JIT approach to manufacturing.
North American organizations are aware of the pressure placed upon them by the success of their Japanese competitors at obtaining phenomenal levels of productivity Opens in new window.
In order to remain competitive and experience economic success, these companies have focused on increasing productivity, improving the quality of their products and raising the standards of efficiency within their firms.
The ability to achieve higher standards of productivity without sacrificing quality is also an important goal of a manufacturing firm. Over the long run, application of JIT manufacturing may assist these companies in achieving these goals of manufacturing excellence.
Manufacturing organizations using JIT make a product when an order is received, rather than make it in advance and hold it until it is sold or discarded. With JIT, customers should not have long waits for delivery of the product.
To make JIT work, the organizations must design systems from order entry to delivery that operate efficiently and immediately. Many firms that offer online shopping apply JIT systems: customers do the order entry accurately at a time convenient for them.
A fully completed order then triggers all the activities required to deliver the products in a timely fashion. JIT is designed to eliminate or reduce activities that do not provide value to customers:
JIT reduces inventory by making the product only when ordered, so there is no wasted product due to obsolescence or lack of demand.
Financing costs of the inventory are lower. Moreover, the costs of warehousing and holding inventories are reduced. Dell Inc. Opens in new window uses JIT and the Internet to quickly deliver tailor-made laptops to a global customer base with a minimal inventory requirement.
Jaguar Opens in new window, the luxury car maker, reduced workplace clutter, floor space needs, and warehousing by adopting JIT and other advanced manufacturing techniques. These changes enabled Jaguar to match supply and demand, improve efficiency, and reduce waste.
JIT works by supplying the product quickly only when demanded. If customers have to wait, they will go elsewhere for the product. Organizations are able to shift to JIT, in part, because of technological changes. For example, the advent of bar-coding and the instant reporting of sales to grocery-store suppliers allowed supermarket chains such as ASDA Opens in new window, Carrefour Opens in new window, and Sainsbury’s Opens in new window to hold less inventory, and offer customers lower prices.
RFID (radio frequency identification) Opens in new window chips make tracking inventory much easier. JIT is frequently used with other advanced manufacturing techniques such as CAM. CAM Opens in new window allows manufacturers to shift production quickly to accommodate changes in demand. The design of Toyota’s automated plants reduces the time of changing over from making one type of car to another.
JIT also is used in service organizations. For example, gourmet food shops prepare orders on demand for delivery to the customer or take out. Food is fresher and less is wasted if not prepared in advance.