Muradzikwa and Mukungu

JIT MANUFACTURING SYSTEM

SUMMARY
The Just-in-Time (JIT) manufacturing system originated in Japan and has its roots
in the Toyota Production System (TPS). JIT is an approach to Production that was
developed to eliminate inventories. (It is a manufacturing system that focuses on
producing and delivering the right quantity of products or components at the right
time to meet customer demand). Inventory ties up investment funds and takes up
space, JIT approach include a number of principles and procedures aimed at
reducing inventory, either directly or indirectly.
BRIEF HISTORY OF THE CONCEPT
After World War II, Japan faced significant economic challenges and limited
resources. Taiichi Ohno, an engineer at Toyota, sought ways to improve
manufacturing efficiency and reduce waste. He developed the concept of JIT as a
response to the resource constraints and market demands of the time.

In the 1950s, Taiichi Ohno and Eiji Toyoda, the then-president of Toyota,
implemented the principles of JIT as part of the Toyota Production System (TPS).
TPS focused on minimizing waste, improving quality, and enhancing productivity
through continuous improvement and employee involvement.

The success of TPS and JIT principles at Toyota caught the attention of other
Japanese manufacturers. Companies like Nissan, Honda, and Mazda began
adopting JIT practices in their production systems. JIT started gaining recognition
globally as Japanese automotive manufacturers gained prominence.

In the 1970s and 1980s, Western companies started to take notice of the success
of Japanese manufacturers and the JIT system. Western manufacturers, including
General Motors and Ford, began implementing JIT principles in their operations to
improve efficiency and competitiveness.

1990s-Present: Today, JIT and lean manufacturing have become integral parts of
modern production systems across industries. The principles of waste reduction,
efficiency improvement, and continuous improvement remain fundamental to JIT
and continue to shape manufacturing practices around the world.

PHILOSOPHY
The philosophy behind JIT is to create a production environment where materials
and resources are received and processed only when they are needed. It requires
close coordination and communication between suppliers, manufacturers, and
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customers to ensure a smooth flow of materials and information throughout the

supply chain.
ENVIRONMENT
JIT thrives in an environment that promotes continuous improvement, teamwork,
and a commitment to quality. It requires a high level of discipline, reliability, and
flexibility from all parties involved to achieve its objectives.
CHARACTERISTICS
Demand-driven
JIT relies on accurate demand forecasting and responsive production to meet
customer needs without excess inventory.
Lean manufacturing
JIT emphasizes the elimination of waste, including excess inventory,
overproduction, waiting time, transportation, and defects.
Pull system
JIT uses a pull-based system where production is triggered by actual customer
orders, rather than pushing products based on forecasts.
Quick changeovers
JIT encourages efficient changeovers between different product types to minimize
downtime and maximize production flexibility.
Continuous improvement
JIT emphasizes ongoing efforts to identify and eliminate inefficiencies, improve
processes, and enhance overall performance.

WASTES
According to the JIT (Just-in-Time) system, waste refers to any activity or resource
that does not add value to the final product or service.
By identifying and eliminating these sources of waste, JIT aims to create a
more efficient and streamlined production system, reduce costs, improve
quality, and enhance customer satisfaction.
JIT identifies several types of waste, often referred to as the "Seven Wastes" or
"Muda," that should be minimized or eliminated.

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These wastes are:

1. Overproduction
Producing more goods or services than what is currently required by customers or
the next step in the production process. Overproduction leads to excess inventory,
increased storage costs, and potential obsolescence.
2. Waiting time
Idle time or delays that occur when workers, equipment, or materials are waiting
for the next step in the production process. Waiting time leads to inefficiency,
decreased productivity, and increased lead times.
3. Transportation
Unnecessary movement of materials, components, or finished products within the
production facility. Excessive transportation increases the risk of damage, adds no
value to the product, and consumes time and resources.
4. Inventory
Excess inventory beyond what is necessary to meet immediate customer demand.
JIT aims to reduce inventory levels to minimize holding costs, reduce the risk of
obsolescence, and improve cash flow.
5. Motion
Unnecessary or excessive movement of workers or equipment within the
production process. This includes walking, reaching, bending, or any non-value-
added physical movements. JIT aims to optimize workstations and layouts to
minimize wasteful motion.
6. Over processing
Performing more work or using more resources than what is required to meet
customer needs. This includes excessive inspections, overcomplicated processes,
or using high-cost materials when lower-cost alternatives are sufficient.
7. Defects
Producing defective products or services that require rework, repairs, or result in
customer dissatisfaction. JIT emphasizes defect prevention, early detection, and
continuous improvement to reduce waste associated with defects.
MERITS
1. Reduced inventory costs

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JIT minimizes the need for large inventories, leading to lower storage and holding
costs.
2. Improved efficiency
By eliminating waste and streamlining processes, JIT improves overall production
efficiency and reduces lead times.
3. Enhanced quality control
JIT emphasizes defect prevention and early detection, leading to higher product
quality.
4. Increased flexibility
JIT allows for quick adjustments in production to meet changing customer
demands and market conditions.
5. Cost savings
JIT reduces various costs associated with inventory, waste, and inefficient
production practices.

DEMERITS
1. Supply chain vulnerability
JIT heavily relies on a well-functioning supply chain, and any disruptions in the
flow of materials or information can have significant impacts.
2. Limited tolerance for errors
JIT leaves little room for errors or unexpected disruptions, making it challenging
to recover from mistakes or delays.
3. High coordination requirements
JIT necessitates close coordination and communication with suppliers and
customers, which can be complex and time-consuming.
4. Initial implementation challenges
Implementing JIT requires significant changes in production processes and
organizational culture, which can be disruptive and met with resistance.

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NB: Although the principal theme in JIT is inventory reduction, this cannot
be simply be achieved. Several requisites must be pursued to make it possible,
These are:
 Reliable supplier base
 Stable production Schedule
 Small Batch sizes and short setup times
 On time delivery
 Defects free components and materials
 Reliable production equipment
 Pull system of production control
 A work force that is capable, committed and cooperative

Just-in-Time (JIT) Inventory Management Explained

JIT inventory ensures there is enough stock to produce only what you need, when
you need it. The goal is to achieve high volume production with minimal inventory
on hand and eliminate waste.

How Does Just-in-Time Inventory Management Work?

JIT inventory management ensures that stock arrives as it is needed for production
or to meet consumer demand, but no sooner. The goal is to eliminate waste and
increase the efficiency of your operations. Since the main objective is often quality
and not the lowest price, JIT requires long-term contracts with reliable suppliers.

JIT is what’s known as a lean management process. In JIT, all parts of any
production or service system, particularly people, are interconnected. They inform
each other and are mutually dependent on generating successful outcomes. This
practice’s origin comes from Kaizen, a Japanese term meaning “change for the
better.” Originating in Japan, the business philosophy looks to continuously
improve operations and involve all employees, from assembly line workers to the
CEO. Like JIT, the goal is to reduce waste and improve quality.

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The JIT Process Diagram and Steps

JIT process diagram
The graphic shows the Just-in-time (JIT) Inventory cycle
Organizations may vary in how they implement JIT in their environment, but the
general steps are the same. This diagram shows how the cycle of continuous
improvement works in JIT inventory management.

Steps in Cycle of Continuous Improvement for JIT Inventory

Design: The JIT process begins with a review of the essential manufacturing
building blocks: product design, process design, personnel and manufacturing
planning. Then plans are put into place to eliminate disruption, minimize waste
and build a flexible system.
Manage: A Total Quality Management (TQM) review ensures there is continuous
improvement throughout the process. A management review defines workers’ roles
and responsibilities, defines and measures statistical quality control, stabilizes
schedules, and checks out load and capacity schedules and levels.
Pull: Educate the team on production and withdrawal methods using signaling
methods like Kanban. Review lot size policies and reduce lot sizes.
Establish: Vendor relationships are vital to the success of JIT. Review vendor lists.
Settle on preferred suppliers, negotiate contracts, discuss lead times, delivery
expectations and usage metrics and measures. Learn how to make the most of them
in the supply chain.
Fine-tune: Determine inventory needs, policies, controls and reduce inventory
movements.
Build: Inform your team about the skills and capabilities it needs to complete its
work and conduct team education and empowerment sessions to educate them.
Refine: Reduce the number of parts and steps in production by refining,
standardizing and reviewing the entire process.
Review: Define and implement quality measures and metrics and conduct a root
cause analysis of any problems. Emphasize improvements and track trends to
improve every aspect of JIT.
Advantages of JIT Inventory Management

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JIT inventory management boosts a company’s ROI by lowering inventory

carrying costs, increasing efficiency and decreasing waste.

Waste Reduction: The JIT inventory management model eliminates overordering

and excess of all kinds.

Reduce Obsolete Inventory and Dead Stock: Low inventory levels significantly
reduce the risk of inventory going unsold and sitting in the warehouse obsolete.
Reduce Defective Product Loss: Defective inventory items are easier to identify
and fix when production levels are low, which reduces scrap costs.
Improved Efficiency: JIT eliminates the costs that come with extra raw materials,
unneeded inventory and product storage.

Raise Inventory Turnover Ratios: Greater efficiency brings higher inventory

turnover.
Minimal Inventory Obsolescence: The high inventory turnover rate keeps items
from sitting in your facility for too long and becoming obsolete.
Minimize Raw Materials on Hand: Receiving deliveries in the smallest possible
quantities — sometimes multiple times per day — virtually eliminates raw
material inventories.
Local Sourcing: When suppliers are located near a company's production facility,
the shortened distances contribute to timely deliveries. On-time, reliable delivery
of goods reduces the need for safety stock.
Greater Productivity: JIT enhances productivity by reducing the time and resources
involved in manufacturing processes.

Faster Product Turnaround: Manufacturers can more quickly produce products.

Shorter Production Runs: With JIT, manufacturers can deliver new products more
quickly and easily.
Simplify Change Orders: Having less raw material stock to draw down before
product changes makes it easier to implement engineering change orders to
existing products.

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Smoother Production Flow: JIT can eliminate bottlenecks and delays across the
entire production process.

Shorter Production Cycles: JIT shortens manufacturing time, which decreases lead
times for customers.
Reduce Product Defects: Production mistakes can be spotted faster and corrected,
which results in fewer defective products.
Shorter Production Runs: Fast equipment setup times reduce production runs,
lowering investment in finished goods.
More Functional Production Cells: Employees walk individual parts through the
processing steps in a work cell, which reduces scrap levels. Cell models also
eliminate work-in-process queues that build up at more specialized workstations.
Compressed Operations: Arranging production work cells near each other limits
the amount of work-in-process inventory moving between cells.
Lower Costs: Receiving goods on an as-needed basis reduces inventory costs.

Reduce Working Capital: The low inventory levels that come with JIT limit the
amount of working capital needed.
Lower Holding Costs: Inventory holding costs (like those for warehousing) are
minimal because less space is used.
Lower Cash Investment: Companies invest less cash in inventory because JIT
doesn’t require having a lot of stock on hand.
Reduce Large Raw Material Spends: In JIT, businesses order raw material when
needed, so cash is available for other uses that could be more valuable to the
company.
Reduce Labor Costs: Labor expenses are lower since the number of person-hours
required to fulfill orders is usually fewer than full-time production.
Improve Quality: A flexible workforce can focus on making quality products with
lower defect rates. Better outcomes increase customer satisfaction and reduce the
cash outlay for production.

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Reduce Work-in-Progress Goods: Fewer items moving on the shop floor allows
teams to focus on building high-quality products.
Less Damage: Since minimal inventory is on hand, storage-related accidents
decline.
Certified Quality: Suppliers guarantee quality in advance. So, deliveries go straight
to production areas instead of being held in receiving to await inspection.
To support these goals, you can invest in new technology or update existing
solutions that will link your system with your suppliers to coordinate the delivery
of parts and materials.

JIT Inventory Methodology

The JIT inventory methodology uses a variety of techniques to smooth operations.
The lean method focuses on optimizing organization, paying attention to detail,
having small lot sizes, increasing transparency, fostering cell manufacturing and
using a pull (rather than push) approach.

Techniques Involved in JIT Inventory Methodology

Order: Maintain a high level of physical and organizational discipline.
Better Quality: Eliminate defects through attention to detail and continuous
improvements.
Reduced Setup Time: Create flexible changeover approaches when setups need to
adjust to meet customer demand.
Small Lot Size: In JIT, one is the ideal lot size. The small size reduces in-process
inventory, carrying costs, storage space, and makes for easier inspection and
rework.
Load Uniformity: Leveling is a control mechanism that achieves a stable, level
daily schedule.
Flow Balance: Flow scheduling organizes throughput for even distribution of
energy and labor.
Diversified Skills: Cross-trained workers can be deployed to different areas to
keep production moving.

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Visibility for Control: Using communication tools, like those found in Kanban,
keeps the entire team informed of inventory levels.
Ongoing Maintenance: Ongoing oversight and focus on detail, including the
machinery and tools the business uses every day, helps maintain a low defect, low
problem environment.
Use Fitness: JIT spaces designed to fit each process speeds up production. One
workstation pulls output from the one before it, as needed, based on a master
schedule or customer demand.
Logical Plant Layout: Product-oriented design makes assembly easier and more
efficient.
Strong Supplier Network: Strong relationships with vendors make JIT inventory
most effective.
Worker Immersion: Every team member should be dedicated to the process and
colleagues to achieve JIT goals.
Cell Manufacturing: Create an environment where groups can work as quickly as
possible to make as many products as they can and limit the waste they create.
Pull System: The process of only replacing products once they’ve been used in
production.

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