A methodology aims to reduce flow
times within production system as well as response times from suppliers and to
customers are known as just in time manufacturing. It means to make only what
is needed and in the required amount needed. For example it is necessary to
create a detailed production plan including parts procurement to efficiently
produce a large number of automobiles. According to the production plan, to
supply what is needed, when it is needed and in the amount needed will
eliminate waste, inconsistencies and unreasonable requirements which results in
improved productivity. This enables to purchase and produce items only as
needed in order to eliminate waste (whether inventory, time or effort) and make
operations more efficient. The reason being that company will carry and process
small amount of raw materials and finished goods and hence there is no need of
in-house warehousing or comprehensive fulfillment processes.
Just in time manufacturing is also
known as Toyota Production System (TPS). This is a unique production control
method called the ‘kanban system’ playing an integral role. The system is also
known as ‘Supermarket method’ since the idea behind it was borrowed from
supermarkets. The mass merchandising stores make use of product control cards
upon which product related information like the name of the product, code and
storage location are entered. Since Toyota had employed kanban signs for use in
their production processes the method came to be known as the Kanban system.
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| source: factsanddetails.com |
To accomplish the goals, some
companies want to increase efficiency and bring down cost by considering just
in time manufacturing business. The system of course provides benefits in
regard to inventory but it also poses risks that can prove detrimental to
operations and sales. The best alternative that a company can look to JIT is
outsourcing warehousing and fulfillment processes to qualified third party
logistics providers.
In JIT production, the cost is
eliminated that add no value to the final product. Without applying critical
thought as a whole, the potential for waste in the process is increased. The
form of waste includes the accumulation of excess inventory, faulty production
methods resulting in scrap and also the unnecessary moving of materials and
specific labor actions. JIT is associated with repetitive manufacturing
processes which results in the same products being produced on a routine basis.
Presently the change in business
environment with the increasingly demanding customers and shorter product life
cycles has put a great impact on the way inventory is held. The excess stocking
allows markets to be served better with leads to high carrying costs. Thus
just-in-time inventory system is a best approach to managing stocks.
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| source: slideshare |
In manufacturing industry the
just-in-time inventory system works well and this produces large volumes of
undifferentiated products, by increasing production of the right part in the
right place at the right time. To be successful in just-in-time inventory system
there are few prerequisites. Some of the prerequisite are mentioned below:-
Stable production schedule – For
effective management of inventory this is very vital factor. Just-in-time
inventory system can succeed only when there is a predictive pattern of demand
and predetermined production schedule to meet it.
Quick setup time – There is no
flexibility in just-in-time process having production processes with long setup
times. Proper planning and design will help in optimizing the complexity of the
equipment and process.
Trained workers – JIT inventory
system requires a team of capable and committed employees so that the work
moves on smoothly. The workers should have inter-disciplinary training so that
they can handle more than one task.
Redeployed idle time – Just-in-time
inventory system works efficiently when the resources are wasted to minimum.
For instance, in between jobs if there is a waiting time for a machine or
worker then it can be used by deploying the resource for another task. Preventive
maintenance is essential in order to cut down loss of productive time due to
machinery breakdown.
Shorter lead times – Delivery lead
time it the total time elapsed between placing of an order and receipt of
goods. The time can be reduced if developing a supplier network is located near
the production site. During the production process the lead time can be reduced
by setting up all workstations in one place.
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| source: slideshare |
To be precise, Just-in-time inventory
system brings many rewards if it is handled and implemented carefully. JIT is
needed to maximize the desirable efficiencies of pull-production. When one is
able to pull parts to production stages and are ready to be used then inventory
flow is improved, goods are processed quickly and increased through reduced lead
times and lot sizes. Waste is thus
reduced, on-time delivery is increased and manufacturing waste is reduced.
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