Just in time – philosophy, characteristics, and the toyota example
Philosophy: The idea of “Just-in-time” (JIT) is to eliminate waste by ensuring that what is acquired is only what is needed at a given time. The opposite of this philosophy is known as “just-in-case”, which seeks to keep items for any possible eventuality. Russell and Taylor (2007) describe the JIT philosophy as “If you produce only what you need when you need it, then there is no room for error”.
Characteristics: In order to maintain a JIT philosophy to be successful in production or manufacturing settings, there needs to be several things present within an integrated system, as follows:
- steady production
- high quality
- adaptable resources
- reliable suppliers
- no machine malfunctions
Use of JIT to support continuous improvement: Let’s use an example to show how JIT can support continuous improvement. The automobile company, Toyota, was looking to answer the question: “How can you give customers exactly what they want? How to you build to order while still building cheaply?”. Toyota practices the JIT philosophy, but wanted to reduce delivery time between dealer order to actual delivery from 74 days down to 14 days. The goal was customer satisfaction, decreased inventory costs, and hopefully increased sales rates. Dealers were given the ability to check their production queues online and see what was in the works for production. If a customer wanted a certain element in their vehicle, the dealer could make changes to a pre-production vehicle in their queues, and the vehicle would then be approved within one day, and started in production assembly. Toyota took it further and utilized IT programs to connect factories and suppliers. The program takes the dealer request for vehicle changes and calculates the impact on the assembly production and helps determine the order these modified vehicles are produced to avoid too many completed one after another, resulting in slowed production all around. The program also determines if cars should be produced by region at one time. As they allowed for customization, Toyota had to figure out how to deal with the aspect of vehicle color. Their current process made it difficult to quickly change from one color to another in the assembly line. The company invested in paint cartridges, which allowed the robotic assembly to change cartridges quickly and easily during production. This new change alone saved them $29 per vehicle, at over $2.5 million per year due to improved efficiency and increased production rates. Finally, distribution was examined, and found to be the largest contributor to the 74-day delay in delivery. They changed their distribution model to have completed vehicles sent to sorting docks to prevent vehicles from sitting in yards waiting for distribution.
Fahey, J. (2004, July 5). Just in time meets just right. Forbes. Retrieved from https://www.forbes.com/global/2004/0705/022.html – 72f4a6971503
Russell, R. S. & Taylor, B. W. (2007). Operations management. (4thed.)Upper Saddle River, NJ: Prentice Hall. Retrieved from Google Books.
The Economist. (2009, July 6). Just in time.Retrieved from https://www.economist. com/node/13976392
Just-In-Time (JIT) is a method that creates “movement of material into a specific location at the required time”, (Murray, M.). It is a system that ensures product requirement is met before it is needed in the manufacturing process. With proper connections with vendors and raw material acquisition, the product is manufactured before the base order is received. It will enable the operation to run properly and smoother eliminating back log and customer order refusal.
The process also allows inventory to be controlled and available at the warehouse before vendors and customer put in a requirement for purchase, thus reducing the amount of excess in the company’s inventory. JIT focuses on the cost savings methodology. Although, even with the proper approach to projecting the actual amount of production, one of the disadvantages is that when raw materials are not readily available from vendors or are not able to deliver the materials on time, there would still be backlog of products. The delivery of goods to vendors and customers may not be achieved.
In order to achieve continuous improvement with operations, a detailed projectile of production must be conducted. This way, raw materials can be ordered in a timely manner allowing vendors to properly source out raw materials and acquire them to allow meeting the company’s required time of delivery. In some cases, raw materials may not be available for a certain amount of time, but at least this will give the company a chance to find alternative vendors to provide the provide the materials required to begin production.
Investopedia. (2018). Just In Time – JIT. Retrieved on June 5, 2018 from https://www.investopedia.com/terms/j/jit.asp
Murray, M. (2018). In Supply Chain – What is Just In Time (JIT)? Retrieved on June 5, 2018 from https://www.thebalancesmb.com/just-in-time-jit-2221262
Richcreek, B., Yang, J. (2001). Just-in-Time Production in Service Operations. Retrieved on June 5, 2018 from https://www.pomsmeetings.org/Meeting2001/2001/cd/papers/pdf/richcreek.pdf