The philosophy of JIT - Just in Time - is a management strategy that aims to eliminate waste from all aspects of manufacturing and related activities. The term JIT is about producing only what is necessary. It is defined as a technique for organizing workflows to allow rapid, high-quality, flexible production while minimizing manufacturing waste and stock levels.
JIT consists of two aspects: Just-in-time production and Just-in-time purchasing. JIT production is a system driven by the demand for finished products, where each component on a production line is produced only when needed for the next stage.
The JIT philosophy focuses on reducing waste, defined by Fujio Cho of Toyota as "anything other than the absolute minimum of equipment, materials, parts, space and workers' time required to add value to the product." In other words, waste is any resource used beyond the bare minimum needed to add value to the product.
Specifically, JIT aims to achieve the following goals:
1. Elimination of non-value-added activities.
2. Zero inventory.
3. Batch size of one.
4. 100% on-time delivery service.
The key features of JIT production include:
1. The production line operates on a demand-pull basis, with the activity of each workstation authorized by the demand of downstream workstations. Thus, parts move through the production system based on end-unit demand, focusing on maintaining a constant flow of parts rather than batches of Work in Progress (WIP).
2. Set-up time and manufacturing lead time are minimized. Demand-led production may require manufacturing small quantities of the product, and producing small batches is economical only if set-up times are small.
3. The production line is stopped if parts are absent or defective work is discovered. In the absence of buffer stock, emphasis is placed on 'doing the job right the first time'. The focus is on eliminating the root causes of defect, waste or rework. JIT goes hand in hand with 'total quality'.
In a JIT environment:
a. The absence of large amounts of materials and work-in-progress inventory enables inventory control through personal observation.
b. Work-in-progress constitutes a lower percentage of the total cost of production.
c. There is no need for an elaborate cost accounting system of stores requisition, material transfer notes, rework accounting and so on.
All the above provide tremendous cost advantages to firms adopting JIT production.
In a JIT environment, the Economic Order Quantity (EOQ) model has lost its relevance because the focus is on synchronizing delivery and usage. Such synchronization requires no stock be purchased in large quantities and kept in stores. Whether a firm should adopt JIT purchasing depends on the reduction in the cost of quality, cost of delayed delivery, cost of early delivery, and ordering costs. All these costs should be compared with the premium payable to suppliers (by way of an increase in the cost of quality products for just-in-time supply). Firms using JIT purchasing have reported significant savings in cost.
From India, Bhopal
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2JIT consists of two aspects: Just-in-time production and Just-in-time purchasing. JIT production is a system driven by the demand for finished products, where each component on a production line is produced only when needed for the next stage.
The JIT philosophy focuses on reducing waste, defined by Fujio Cho of Toyota as "anything other than the absolute minimum of equipment, materials, parts, space and workers' time required to add value to the product." In other words, waste is any resource used beyond the bare minimum needed to add value to the product.
Specifically, JIT aims to achieve the following goals:
1. Elimination of non-value-added activities.
2. Zero inventory.
3. Batch size of one.
4. 100% on-time delivery service.
The key features of JIT production include:
1. The production line operates on a demand-pull basis, with the activity of each workstation authorized by the demand of downstream workstations. Thus, parts move through the production system based on end-unit demand, focusing on maintaining a constant flow of parts rather than batches of Work in Progress (WIP).
2. Set-up time and manufacturing lead time are minimized. Demand-led production may require manufacturing small quantities of the product, and producing small batches is economical only if set-up times are small.
3. The production line is stopped if parts are absent or defective work is discovered. In the absence of buffer stock, emphasis is placed on 'doing the job right the first time'. The focus is on eliminating the root causes of defect, waste or rework. JIT goes hand in hand with 'total quality'.
In a JIT environment:
a. The absence of large amounts of materials and work-in-progress inventory enables inventory control through personal observation.
b. Work-in-progress constitutes a lower percentage of the total cost of production.
c. There is no need for an elaborate cost accounting system of stores requisition, material transfer notes, rework accounting and so on.
All the above provide tremendous cost advantages to firms adopting JIT production.
In a JIT environment, the Economic Order Quantity (EOQ) model has lost its relevance because the focus is on synchronizing delivery and usage. Such synchronization requires no stock be purchased in large quantities and kept in stores. Whether a firm should adopt JIT purchasing depends on the reduction in the cost of quality, cost of delayed delivery, cost of early delivery, and ordering costs. All these costs should be compared with the premium payable to suppliers (by way of an increase in the cost of quality products for just-in-time supply). Firms using JIT purchasing have reported significant savings in cost.
From India, Bhopal
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