Just In Time Manufacturing: Definition, Benefits, and Origin
New technologies, raw materials, and production strategies are being adopted daily as companies strive to remain competitive in their respective industries and to meet changing customers’ demands. Manufacturers must remain flexible and adaptable in their production methods to allow adjustments to their supply chain.
Manufacturers can adopt many different production strategies, each with advantages and disadvantages. Some popular production strategies include Lean Manufacturing, Agile Manufacturing, and Just in Time Manufacturing.
Let’s have an in-depth look at Just In Time Manufacturing.
What Is Just In Time Manufacturing?
Just in Time manufacturing (JIT) is a production strategy that produces goods based on customer orders. This strategy is used to minimize inventory and increase efficiency within a company’s supply chain. JIT closely coordinates the flow of materials, information, and equipment, so that customer orders are produced and delivered within specific time windows.
Just in Time manufacturing borrows heavily from the “lean manufacturing” philosophy. Lean manufacturing focuses on reducing waste and maximizing efficiency in all production areas. By implementing JIT manufacturing and lean principles, companies reduce production costs and improve competitiveness.
JIT Manufacturing Origins
Just in Time was created in Japan in the early 1970s. This process has been prevalent in Japanese manufacturing organizations since then. Taiichi Ohno, “father of the Toyota Production System,” first created the model within the Toyota manufacturing facilities to meet customer requests with the fewest possible delays.
Ohno observed that traditional mass-production methods resulted in large amounts of waste, including excess inventory, overproduction, and defects. He believed that by eliminating these types of waste, companies could significantly improve their efficiency and profitability.
He developed the pull system and kaizen techniques to implement the lean manufacturing concept. The methods involved customer demand-driven production and the involvement of employees in identifying and solving problems. Just In Time manufacturing gained popularity in Japan in the 1970s and 1980s, and it is a widely used strategy in various industries.
How Does the JIT Inventory System Work?
A Just in Time inventory management system aims to minimize inventory levels by only ordering products as needed for production or sale. The basis of the idea is that holding large amounts of inventory is costly and inefficient. The Just-in-Time system works by closely coordinating the production schedule with the delivery schedule of suppliers and the projected buying patterns of customers.
One key aspect of the Just-in-Time system is the lead time when a supplier delivers an order after it is completed. This aspect of the process requires close coordination between the manufacturer and the supplier to ensure that items can be shipped quickly. This is another example of how lean manufacturing processes minimize waste and improve efficiency.
One example of a company using a Just in Time inventory system is Dell Computer. Dell waits until it receives the order for its computers and only orders the components and parts needed for that specific order.
JIT Manufacturing vs. Traditional Methods
One of the main differences between JIT manufacturing and traditional manufacturing involves production and storage processes. In JIT manufacturing, production occurs only on customers’ orders, which helps to reduce waste and increase efficiency. In conventional manufacturing, goods are produced in advance and stored in inventory.
JIT manufacturing is more flexible and responsive to demand changes, while traditional methods are more rigid and harder to adjust. This flexibility enables JIT manufacturing to analyze its production processes to improve product quality frequently. However, JIT manufacturing requires a high level of coordination and communication between suppliers, manufacturers, and customers.
For the Just in Time strategy to be effective, organizations must meet several requirements.
Here are some requirements for an effective JIT strategy.
Small lots refer to the ability of a supplier to produce and deliver goods or services in smaller quantities more frequently. Suppliers must be able to make and deliver goods in small amounts and adapt to frequent and short-notice delivery schedules.
This approach enables manufacturers to match production with actual demand better, reducing
inventory costs and improving overall efficiency. It also provides greater flexibility in responding to changes in order or unforeseen events.
Workflow efficiency ensures timely production and delivery that meet customer needs. The production process provides continuous flow manufacturing by streamlining operations to minimize delays and ensure timely delivery to the customer.
This part of the strategy requires good communication and coordination between the supplier and the manufacturer. It includes using automation tools and implementing process improvement methodologies such as Lean or Six Sigma to optimize the workflow.
Excellent Supplier Relationships
Strong suppliers are critical in ensuring that the production and delivery of goods remain on schedule. These suppliers must be able to make and deliver goods in small quantities and adapt to frequent and short-notice delivery schedules.
To meet this requirement, suppliers must actively communicate and coordinate based on an excellent understanding of the manufacturer’s production process. They must also have a good track record of timely delivery, consistent quality, and the ability to respond quickly to changes in demand.
Good Communication with Internal Stakeholders
Good internal communication is essential for Just in Time manufacturing. It supports the efficient flow of information throughout the organization. Good internal communication ensures that everyone knows schedules and deadlines. It also enables the organization to rapidly identify and respond to changes in customer demand rapidly.
Standardized operations involve establishing clear procedures, processes, and protocols. These enable the efficient and consistent flow of raw materials, components, and products through the production process. This predictable flow of materials and products through the production process helps to minimize delays and errors.
Standardized operations make it easier to identify and resolve problems when they occur and. improve production processes, resulting in efficiency across the operation. It also allows the organization to respond rapidly to changes in customer demand and minimize delays or stockouts.
The pull system is a production control method based on the actual demand for a product. It helps to reduce the required inventory or buffer stock. Suppliers only provide raw materials and order components when needed.
Ability to Schedule Backwards
Backward scheduling involves starting with the customer’s due date and working backward through the production process. It determines when you must complete each step to meet that deadline. The organization plans and schedules production to minimize delays and stockouts and ensures everything is in place when needed.
By working backward, you verify that resources, personnel, and raw materials are available at the right time. Companies can quickly identify potential problems or delays and address these issues in advance. It also helps to ensure a continuous flow of manufacturing that runs smoothly and efficiently and that customer demand is met on time and at the right quality.
One of the critical principles of JIT manufacturing is continuous improvement. It involves continuously looking for ways to improve the efficiency and effectiveness of the supply chain. By constantly seeking ways to improve, JIT manufacturing helps companies stay competitive and respond quickly to changes in the market.
The improvement includes identifying and eliminating waste, streamlining processes, and implementing new technologies. Delivery of personalized materials and components by suppliers also helps improve the process.
Benefits of Just In Time Manufacturing
Just-in-Time manufacturing helps reduce a firm’s operational costs. This reduction is achieved by lowering inventory costs, improving efficiency, and reducing waste. Improving supplier relationships and reducing lead times can also lead to cost savings in the long run.
Just in Time production is a manufacturing strategy designed to increase efficiency and reduce waste by producing goods only as needed. Increased efficiency helps companies to match supply with demand, improving their production processes. Just in Time production also reduces lead times, increasing customer satisfaction.
Flexibility in manufacturing increases when using the JIT strategy. Because JIT production focuses on producing what is needed when it is needed, companies can adapt more quickly to changes in customer demand or market conditions. Just in Time also allows manufacturers to adjust production levels, which helps to reduce the risk of overproduction and excess inventory.
The quality of a product and service significantly improves in manufacturing firms using the JIT philosophy. Just in Time focuses on frequent monitoring and continuous improvement throughout the production process. It also allows for regular inspections, helping identify and correct quality issues early in the production process.
Just in Time production also leads to better supplier relationship management. Suppliers and manufacturers must work together to ensure that materials and components deliveries are on time, based on the production schedule. This close collaboration helps build trust and mutual understanding between manufacturers and suppliers, leading to more effective communication and problem-solving.
Risks of Just in Time Manufacturing
Just-in-Time manufacturing relies highly on effective suppliers to reduce inventory. The production process can be affected if a supplier experiences delays or disruptions, creating production bottlenecks. Due to the minimized inventory holding in JIT, it leaves a small room for error or unexpected demand.
Just in Time manufacturing may also result in quality control issues. It is a high-pressure environment, with tight deadlines and little room for error or random quality control evaluations.
What Companies Benefit Most from JIT Manufacturing?
Just in Time manufacturing is a production method that is ideal for companies with a high volume of orders and frequent inventory turnover. The main goal of JIT is to reduce the cost of storing and maintaining excess inventory while also improving the overall efficiency of the production process.
This strategy is also effective for automotive, electronics, and consumer goods production. These industries have a high demand for their products and need to respond quickly to changes in market trends.