Just in Time (JIT)

`Just-in-time’ is a management philosophy and not a technique.

It originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the `customer’ is the final purchaser of the product or another process further along the production line.

It has now come to mean producing with minimum waste. “Waste” is taken in its most general sense and includes time and resources as well as materials. Elements of JIT include:

• Continuous improvement
  • Attacking fundamental problems: anything that does not add value to the product.
  • Devising systems to identify problems.
  • Striving for simplicity: simpler systems may be easier to understand, easier to manage and less likely to go wrong.
  • A product oriented layout: produces less time spent moving of materials and parts.
  • Quality control at source: each worker is responsible for the quality of their own output.
  • Poka-yoke: `foolproof’ tools, methods, jigs etc. prevent mistakes
  • Preventative maintenance, Total productive maintenance: ensuring machinery and equipment functions perfectly when it is required, and continually improving it.
• Eliminating waste. There are seven types of waste:
  • Waste from overproduction.
  • Waste of waiting time.
  • Transportation waste.
  • Processing waste.
  • Inventory waste.
  • Waste of motion.
  • Waste from product defects.
• Good housekeeping: workplace cleanliness and organisation.
• Set-up time reduction: increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
• Levelled / mixed production: to smooth the flow of products through the factory.
• Kanbans- simple tools to `pull’ products and components through the process.
• Jidoka (Autonomation): providing machines with the autonomous capability to use judgement, so workers can do more useful things than standing watching them work.
• Andon (trouble lights): to signal problems to initiate corrective action.

JIT in Production and Operation Management

• JIT provides an efficient production in an organization and delivery of only the necessary parts in the right quantity, at the right time and place while using the minimum facilities”.

Benefits of JIT

The most significant benefit is to improve the responsiveness of the firm to the changes in the market place thus providing an advantage in competition. Following are the benefits of JIT:

(i) Product cost: is greatly reduced due to reduction of manufacturing cycle time, reduction of waste and inventories and elimination of non-value added operation.

(ii) Quality: is improved because of continuous quality improvement programs.

(iii) Design: Due to fast response to engineering change, alternative designs can be quickly brought on the shop floor.

(iv) Productivity improvement.

(v) Higher production system flexibility.

(vi) Administrative and ease and simplicity.

The key to just-in-time inventory management is rigorously monitoring your use of supplies and timing replacement deliveries when they are needed, says BDC Consultant Guy Chartrand, an operational efficiency expert.

“It’s a real balancing act,” says Chartrand, who advises clients in the Ottawa region. “You have to avoid running out of stock and upsetting your customers, while also minimizing your inventory costs.”

Technology can be a big help

If you’re still handling inventory manually, chances are you’re prone to errors and poor forecasts and have no means to measure supply and demand. The good news is that technology can solve these problems.

There are a variety of options available to help you manage inventory, ranging from a fully integrated Enterprise Resource Planning (ERP) systems to more affordable software products.

“You should automate as much as possible, but not all small businesses have the cash to buy sophisticated inventory technology,” Chartrand says. “At the minimum, you need a system that alerts you to reduced inventory levels so you can replenish them.”

Important to reduce miscounts

“Inventory miscounts are also common at the receiving and order fulfillment stage, especially if you’re working manually,” he says. “Using electronic data interchange (EDI) and bar code scanning can help eliminate data entry errors.”

Larger businesses should work to sync their computer systems with those of suppliers who can then directly monitor inventory levels at factories, distribution centres or stores.

Here are some other tips on how to implement just-in-time inventory management.

1. Review your supply chain

Work to build strong, long-term relationships with suppliers. The goal is to work with companies you can rely on to deliver on time and that will go the extra mile to meet a tight schedule.

“It also helps to have multiple suppliers in nearby locations to reduce shipping time and costs,” Chartrand says.

2. Be transparent with your customers

Be upfront about how you manage inventory and your lead-time requirements to meet their orders. “You might feel you’ll lose a client if you can’t deliver on the spot. But if you have a quality product and good relationship with them, you’ll retain their loyalty.”

3. Get outside help on managing your supply chain

Just-in-time inventory management is just one step in increasing your company’s operational efficiency. Hire an expert to look at all aspects of your supply chain management and production processes.