Importance of Just-In-Time Inventory System

In today's competitive world shorter product life cycles, customers rapid demands and quickly changing business environment is putting lot of pressures on manufacturers for quicker response and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs can easily become prohibitive. A wiser approach is to make your production agile, able to adapt to changing customer demands. This can only be done by JUST IN TIME (JIT) philosophy.

Taiichi Ohno, a former shop manager and eventually vice president of Toyota Motor Company, is the individual credited most for the with the development of just-in-time. It is a term used to describe the Toyota production system, is widely recognized today as the one of the most efficient manufacturing system in the world. In simple words we can explain JIT only required necessary units be provided in necessary quantities at necessary times. Producing one unit extra is as bad is being one unit short. Completing one day early is as bad as finishing one day late. Items are supplied "just-in-time". Ohno describes the development of JIT as

*By actually trying, various problems become known. As much problems become gradually clear, they taught me the direction of the next move. I think that we can only understand how all of these pieces fit together in hindsight.

The concept is very simple, if you produce only what you need when you need it, then there is no room of error. JIT has truly changed the face of manufacturing and transformed the global economy. JIT is both a philosophy and collection of management methods and techniques used to eliminate waste (particularly inventory). In JIT workers are multifunctional and are required to perform different tasks. Machines are also multifunction and are arranged in small U-shaped work cells that enable parts to processed in a continuous flow through the cell. Workers produce pars one at a time within cells and transport those parts between cells in small lots. Environment is kept clean and free of waste so that any unusual occurrence are visible. Schedules are prepared only for the final assembly line, in which several different models are assembled at the same line. Requirements for the component parts and subassemblies are then pulled through the system. The "PULL" element of JIT will not work unless production is uniform and lot sizes are low. Pull system is also used to order material from suppliers (fewer in numbers usually). They make be requested to make multiple deliveries of the same item in the same day, so the manufacturing system must be flexible.

Just-in-time inventory is viewed as the waste of resources and considered as obstacle in improvement. As there is little buffer inventory between the workstations, so the quality must be high and efforts are made to prevent machine breakdowns. When all these things are taken into consideration, system produces high-quality goods, quickly and at low cost. This system is also being able to respond to changes in customer demands. These elements of JIT can also be applied to the almost any operation, including service operations.*K.Suzuki, The Manufacturing Challenge(New York: Free Press, 1985), p250

Ali Abbas, Student of Operations Management, Currently doing BBA form Mohammad Ali Jinnah University one of the leading institute in Business Administration & Computer Sciences of Pakistan

---

The New Economy

This technological revolution has organization, efficiency and productivity requirements well... Read More

Business Innovation ? Improvisation

Creativity can be defined as problem identification and idea generation... Read More

Data Delivers Credibility

Over the past couple of days I've been setting up... Read More

Behavioral Interview Questions You Can Use Monday Morning

If past behavior is the best way to determine future... Read More

ISO 9001 Compliant Program: Steps to Build

Implementing an ISO 9001 system represents a major effort. However,... Read More

What Makes a Good Appraisal Interview?

WHAT MAKES A GOOD APPRAISAL INTERVIEW?Here is a tip for... Read More

Business Knowledge Management

In the last few years a lot has been written... Read More

Be a Change Agent ( Part 1)

Aligning business organizations to be successful in the present and... Read More

Business Innovation ? Status Games

Creativity can be defined as problem identification and idea generation... Read More

Planning a Productive Retreat

What value is there in leadership or team-building retreats? Just... Read More

Time Management Tip: Stop Micro-Managing Employees

If I was a fly on the wall what would... Read More

How To Use Outsourcing To Beat Your Competition

Outsourcing is when you hire outside professionals or services to... Read More

Innovation Management: The Power of Emotional Attachment

Creativity can be defined as problem identification and idea generation... Read More

Want to Manage Your Time? Get Real!

You know the drill - the ridiculous deadlines, the relentless... Read More

Employee Retention: Keeping the People Who Keep You in Business

The retention of highly skilled knowledge workers is one of... Read More

Motivation - It Starts with Acknowledgement

Acknowledgement is about recognition or attention from another person. It... Read More

Employees - Treat Them the Way They Expect to be Treated

When you have to deal with one of your team... Read More

Tales from the Corporate Frontlines: Coworker and Caretaker

This article relates to the Coworkers competency, commonly evaluated in... Read More

Status Quo Pep Talks That Can Threaten Your Leadership

Organizations live and die by results. Yet most organizations get... Read More

What Is Business Sense?

What is the principal thing you need to succeed in... Read More

4 Tips on How to Avoid Communication Lines Breakdown

For example, in a small, two-person company, there is often... Read More

The Significance of the Mundane

This article begins with a tip of the hat to... Read More

5 Ideas To Leverage The 3 Stages Of Career Development In Your Organization

In most industrialized nations, the average age a student graduates... Read More

Innovation Management ? Selecting Good Ideas

Creativity can be defined as problem identification and idea generation... Read More

What We Have Here Is A Failure To Communicate

Today's successful organizations are the ones which carry on open... Read More

Finding Proactive Solutions: A Key to Demonstrating Your Management Fitness

In my book Talking Points: 25 Tips for Clear, Credible... Read More

Satisfied Employees, A Powerful Marketing Strategy

Even in today's still uncertain economic times, there are companies... Read More

How to Leverage Your Strengths for Peak Performance

Ask almost any business leader how to most effectively develop... Read More

Knowledge Management: More Than Just Know-how!

People sometimes interchange the terms "know-how" and "knowledge", but there's... Read More

Managing YOUR Expectations

I sit on the board of an organization and at... Read More

Protect Your Computer System with a Comprehensive Security Policy

The most difficult part of creating a Security Policy for... Read More

Building Shareholder Value Through Your People

Increasing shareholder value is the most important driver for organisations... Read More

Leadership Skills

Recent studies have shown that industrial supervisors are working at... Read More