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Just-In-Time Manufacturing (JIT)
Posted on: November 17, 2012 at 12:00 AM
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Just in time is a concept of zero wastage production in project management that was first introduced in United States by Ford motor company that lays emphasis on reducing the carrying cost of inventory in order to get maximum profit by reducing wastage. Basically, Just-In-Time Manufacturing (JIT) production system demand-pull production strategy instead of the traditional production-push production strategy.

Just in time is a concept of zero wastage production in project management that was first introduced in United States by Ford motor company that lays emphasis on reducing the carrying cost of inventory in order to get maximum profit by reducing wastage.

Basically, Just-In-Time Manufacturing (JIT) production system demand-pull production strategy instead of the traditional production-push production strategy and thus gives more importance on the production of only required amount of goods on demand and thus avoids stock. Thus, in Just in time concept the quantity and time is given more importance.

That means the amount of stock levels of raw materials, components, work in progress and finished goods are kept minimum in order to avoid over stock. To maintain this an effective plan of schedule and flow of resources through the production process is required that can be attained with the use of various sophisticated production scheduling software that can provide the needed information of plan production for each period of time including ordering the correct stock. In addition to that, continuous exchange of information between the supplier and the customers takes place with the help of EDI (Electronic Data Interchange) ensuring the correct exchange of details.

The most common practices deployed for carrying just in time (JIT) production are Kanban, continuous improvement and total quality management (TQM).

Moreover, Just-in-time production system is more dependent upon proper planning of procurement policies and the manufacturing process for the success of the project.

Advantages Just-In-Time Systems

Just-in-Time production system has many advantages due to which most of the manufacturing units are adopting JIT these days. Some of the major advantages of adopting Systems are:

  • Just-in-time manufacturing reduces the inventory carrying cost to minimum and defines exactly what amount of space is needed for storing stock thus one need not to pay extra rent for the space.
  • Just-in-time manufacturing system eliminates waste, as there is no concept of expired products in this system.
  • In JIT production only the required stocks are obtained thus less amount of working capital is invested for procurement. In addition to that, a minimum re-order level is defined in JIT and the further procurement of stock is only done when the previous stocks reaches the re-order level.
  • Due to reduction in carrying cost, the return on investment is increased significantly.
  • As JIT production is based on a demand-pull basis, there is no over-stock, as all goods made would be sold.
  • Just-in-time manufacturing emphasizes on the "right first time" concept that reduces the cost of inspection, evaluation and validation.
  • The output in a JIT production system is of high quality and greater efficiency.
  • All the points of production chain are co-related in a just-in-time manufacturing system.
  • JIT ensures continuous communication with the customer thus resulting in high level of customer satisfaction.

Disadvantages of Advantages Just-In-Time Systems:

  • Though there are various advantages of adopting Jus-in-Time production system, but there are also some the disadvantages of adopting Just-In-Time Manufacturing Systems:
  • Just-in-time manufacturing system follows the concept of zero tolerance for mistakes and thus making it very difficult for practice, as inventory is kept to a bare minimum.
  • The process is highly dependent on the suppliers who are not in control of the manufacturers.
  • If an unexpected increase of orders is demanded suddenly, the organisation may fail to fulfil that extra demand due to lack of stock as well as finished goods immediately.
  • The transaction cost increases due to frequent transactions.
  • Frequent deliveries of goods to the suppliers leads to increase in transportation cost and it's an environmental concern too.

Precautions of Advantages Just-In-Time Systems:

  • Implementing Just-in-Time (JIT) concept in the production system can be made more effective by keeping in mind certain things as precautions:
  • All levels of organisations should be equally supported by the management for effective implementation of just-in-time manufacturing system.
  • Good relationship with the suppliers is equally important for success of JIT system.
  • Implementation of effective JIT system requires adjustment in the time and corporate culture, as it is a complete transformation from the earlier manufacturing system.
  • Proper training should be provided to the workers in order to enhance quality and save time by minimizing mistakes.
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