Want to streamline your entire process from start to finish, cut costs, and save a bundle of money? Consider implementing this proven production strategy.
Typically, most manufacturers stock raw materials, components, or finished goods for future orders. In the case of small- and medium-sized companies, it is usually very costly to stockpile in a warehouse for just-in-case purposes.
In Japan, it was Toyota that first came up with the philosophy of Just-In-Time (JIT), instead of the Just-In-Case (JIC) method, to reduce high levels of stock and increase cost efficiency.
Just-In-Time means that stock levels of raw materials, components, works-in-progress, and finished goods can be kept to a minimum. Although JIT requires carefully-planned scheduling and reliable flow of resources throughout the production process, supplies are delivered directly to the production line only when needed. For example, a car-manufacturing plant might receive the exact number of parts and materials from suppliers to build a certain number of cars in one day’s time.
“Just-In-Time means that stock levels of raw materials, components, works-in-progress, and finished goods can be kept to a minimum.
Unlike typical manufacturing processes, in JIT manufacturing, assemblers do not have the choice of which parts to use; every part must fit correctly, and there is no space for errors. Quality-checking is almost eliminated within the production line, which also works to increase the quality assurance and productivity rates.
JIT advantages are as follows:
- A smaller amount of storage space is required
- Less working capital is tied up in stock
- Obsolete or out-of-date supplies are significantly reduced
- Build-up of unsold, finished goods is avoided due to change in demand
- Gets the job done right the first time.
Although JIT is a very responsive method of production, there are a few disadvantages that come along with it. For example, stock may not get delivered on time, or a sudden, unexpected increase in the order could occur which usually could not be planned for or forecasted ahead of time.
JIT represents an extremely reliable method that could be adopted by the manufacturers of our region, as suppliers are normally located at a close distance, and delivery time is not an issue. When JIT quality assurance starts at the input stage of production, faulty products will drop substantially, and profitability should increase.
