Just-in-time (JIT) manufacturing is a production methodology or management philosophy that intends to accurately adhere to buyer demand, in terms of quantity and quality. In other words, JIT manufacturing is designed to accurately meet market demand, and not produce in advance or excess. The production model churns out exact quantities at the right time. JIT is similar to Kanban, total quality management (TQM) and continuous improvement.
To successfully implement JIT production, meticulous planning should be done with regard to manufacturing and procurement. Building a trusting, close-knit relationship with vendors is key to reduce any inventory delays. For instance, if an auto manufacturer receives an order for a car painted in a specific color at short notice, it should be able to procure the necessary paint from the supplier at the earliest, sans much documentation or human interference. Simply put, an Internet or software-based supply chain system should be in place.
A dedicated and committed workforce is also essential. Employees who aren’t up for short deadlines and unwilling to work for hours together cannot move the JIT system along.
- There’s little to zero inventory costs. As a result, the storage space requirements are less and the factory rent also goes down.
- Working capital requirements are lower since essential stocks or raw material requirements are minimal. Fresh stocks are procured only when the previous batch is finished and delivered.
- All items produced are sold as the manufacturing is carried out according to buyer order. Therefore, any likeliness of wastage or unsold goods are ruled out.
- The lack of inventory also means obsolete stock items, a design change in the product, etc. won’t render the inventory useless.
- Since there’s almost zero inventory, there is no margin for error. If a unit doesn’t adhere to customer specifications, it’s almost impossible to rework from scratch.
- Line idling and production downtime could cause delays – something JIT manufacturing doesn’t tolerate.
- Suppliers are pivotal to the JIT production methodology. Any discrepancy from their side can harm the entire JIT chain. Working with multiple suppliers is also not possible, in order to maintain consistency and quality. All the stakeholders, internal and external, must be in harmony throughout.
- This excessive dependence on vendors means the company cannot hide many secrets from its vendors. An intimate professional relationship between the manufacturer and supplier is needed.
- The absence of inventory means the firm cannot possibly acknowledge an unplanned increased demand scenario.
- The dependence on transportation is generally high since every product lot, which is limited and unique to specific clients, must head out of the factory on time.
A Japanese approach, JIT manufacturing has been in use in several Japanese manufacturing firms since the 1970s. Taiichi Ohno, a former Toyota production engineer and the brain behind the Toyota Production System (TPS), developed JIT to ensure minimum waste and lesser product delays.
Though most see JIT synonymous with Japan or the Toyota Motor Corporation in particular, it’s believed Toyota sought its inspiration from other companies, such as the Ford Motor Company, which were using a similar production model. Toyota picked up the concept and polished it for self-implementation and adoption by other manufacturers.
JIT system is fairly widespread and companies such as Toyota Motor Company, Ford Motor Company, General Motors, Harley Davidson, etc. use this manufacturing method.