A methodology that aims to reduce flow times within the production system, as well as response times from suppliers and to customers, is 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, 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 a small number of raw materials and finished goods and hence there is no need for 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 the ‘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 is entered. Since Toyota had employed kanban signs for use in their production processes the method came to be known as the Kanban system.
To accomplish the goals, some companies want to increase efficiency and bring down costs 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 adds 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 result in the same products being produced on a routine basis.
Presently the change in a business environment with 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 the best approach to managing stocks.
In the 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 a just-in-time inventory system there are few prerequisites. Some of the prerequisites are mentioned below:-
Stable production schedule
For effective management of inventory, this is a very vital factor. A just-in-time inventory system can succeed only when there is a predictive pattern of demand and a predetermined production schedule to meet it.
Quick setup time
There is no flexibility in just-in-time processes having production processes with long setup times. Proper planning and design will help in optimizing the complexity of the equipment and process.
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
A just-in-time inventory system works efficiently when the resources are wasted to a 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
The delivery lead time is the total time elapsed between placing 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.
To be precise, the 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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