"Just-in-time" is a management philosophy and not a technique.
It originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the `customer' is the final purchaser of the product or another process further along the production line.
It has now come to mean producing with minimum waste. "Waste" is taken in its most general sense and includes time and resources as well as materials. Elements of JIT include:
- Continuous improvement.
- Attacking fundamental problems - anything that does not add value to the product.
- Devising systems to identify problems.
- Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong.
- A product oriented layout - produces less time spent moving of materials and parts.
- Quality control at source - each worker is responsible for the quality of their own output.
- Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
- Preventative maintenance,
- Total productive maintenance - ensuring machinery and equipment functions perfectly when it is required, and continually improving it.
- Eliminating waste.
There are seven types of waste:
Waste from overproduction.
Waste of waiting time.
Waste of motion.
Waste from product defects.
- Good housekeeping - workplace cleanliness and organisation.
- Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is 1item.
- Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
- Levelled / mixed production - to smooth the flow of products through the factory.
- Kanbans external link - simple tools to `pull' products and components through the process.
- Jidoka (Automation) - providing machines with the autonomous capability to use judgement, so workers can do more useful things than standing watching them work.
- Andon (trouble lights) - to signal problems to initiate corrective action.
Advantages Just-In-Time Systems
Following are the advantages of Adopting Just-In-Time Manufacturing Systems
- Just-in-time manufacturing keeps stock holding costs to a bare minimum. The release of storage space results in better utilization of space and thereby bears a favorable impact on the rent paid and on any insurance premiums that would otherwise need to be made.
- Just-in-time manufacturing eliminates waste, as out-of-date or expired products; do not enter into this equation at all.
- As under this technique, only essential stocks are obtained, less working capital is required to finance procurement. Here, a minimum re-order level is set, and only once that mark is reached, fresh stocks are ordered making this a boon to inventory management too.
- Due to the aforementioned low level of stocks held, the organizations return on investment (referred to as ROI, in management parlance) would generally be high.
- As just-in-time production works on a demand-pull basis, all goods made would be sold, and thus it incorporates changes in demand with surprising ease. This makes it especially appealing today, where the market demand is volatile and somewhat unpredictable.
- Just-in-time manufacturing encourages the 'right first time' concept, so that inspection costs and cost of rework is minimized.
- High quality products and greater efficiency can be derived from following a just-in-time production system.
- Close relationships are fostered along the production chain under a just-in-time manufacturing system.
- Constant communication with the customer results in high customer satisfaction.
- Overproduction is eliminated when just-in-time manufacturing is adopted.
Following are the disadvantages of Adopting Just-In-Time Manufacturing Systems
- Just-in-time manufacturing provides zero tolerance for mistakes, as it makes re-working very difficult in practice, as inventory is kept to a bare minimum.
- There is a high reliance on suppliers, whose performance is generally outside the purview of the manufacturer.
- Due to there being no buffers for delays, production downtime and line idling can occur which would bear a detrimental effect on finances and on the equilibrium of the production process.
- The organization would not be able to meet an unexpected increase in orders due to the fact that there are no excess finish goods.
- Transaction costs would be relatively high as frequent transactions would be made.
- Just-in-time manufacturing may have certain detrimental effects on the environment due to the frequent deliveries that would result in increased use of transportation, which in turn would consume more fossil fuels.