Just-In-Time (IT) is considered inventory management and problem-solving approach used for the purpose of re-filling or scheduling material, labor, and goods in the manufacturing process as and when required. It is a manufacturing process through which instead of keeping an excess inventory, organizations prefer to manufacture goods as an order is received. In other words, JIT is a management philosophy used for continuous and forced problem-solving.
The main objective of the JIT system includes the following:
Removing Wastage: This includes minimizing the quantity of equipment, material, space, parts, and time of worker. This facilitates adding a significant value to the product.
Enhance Productivity: JIT includes producing goods or services as per the market demand when required. Generic components of lean systems are incorporated into it. The lean system supplies different goods or services as per the customer’s desire and as per their preferred time and without wastage. Overall efficiency increases by deploying JIT. It also decreases inventory that ultimately results in decreasing wastes and saving enough money. JIT has many benefits as mentioned under:
- Work productivity enhancement
- A decrease in operating costs
- Improvement in performance
- Quality improvement
- Improvement in deliveries
- Enhances flexibility
Background of JIT
Just-in-time (JIT) is considered a Japanese manufacturing management approach and was initiated in the 1970s. At first, Toyota’s manufacturing plant had adopted this concept with the purpose of meeting the demand of customers. After introducing by Toyota, JIT was followed by various companies and in the mid-1970s, many companies started using it widely.
Characteristics of JIT
Elimination of Waste
As per the JIT, there are seven wastes that need to be removed i.e., over-production, waiting time, inventory, efforts, movement, over-processing, and defective products. These wastes are described below in detail:
This is related to manufacturing products before it is actually required. In the case of reduced demand, the extra products or parts developed may be of no use. Also, over-production may increase storage costs, and detecting defects also becomes difficult. Therefore, over-production is viewed as a waste.
If there is an excess of purchase or production, a stock of materials arises that is not used on an immediate basis. This results in space and fund blocking and includes heavy costs.
Time wastage occurs if there is no movement of goods or not being processed. The operator or machine or the part sits idle in such a situation. This waiting time is considered unproductive and results in serious consequences.
There is a waste of energy in case of unnecessary movement and results in blockages, delays in the flow of other items.
Waste of resources occurs when people working on goods are not aware of the utilization mechanism of the product and the purpose of the goods. Therefore, it creates a lack of resources when required.
Products that are defective create a great loss to the organization because the same equipment, workers, and time are used by these that are used to develop good products. So, resources are used by defective products and this generates losses.
There is no value addition to the final product due to few steps such as unnecessary production or processing. This results in the wastage of all the inputs that undergo the process.
One more waste has been identified i.e.
The unutilized or Unused Potential of Employees
This reveals that the organization will suffer in absence of the utilization of employees to their full capacity or potential. So, it is required to understand the potential of employees for utilizing them to their maximum capacity.
Earlier, production managers relied upon the housekeeping concept for a neat, efficient workplace and as a way to reduce waste. Further, the operations manager includes a checklist termed 5S which is an improved aspect of housekeeping. The initial 5Ss were developed by the Japanese.
These 5S are explained below:
Sort or Segregate
This includes keeping what is required and removing other items that are not needed from the workplace. In case of any doubt, unnecessary things need to be thrown out. Non-value items should be identified and removed. This helps in making space available and improving workflow.
Simplify or Straighten or Set in Order
Analysis tools are arranged and used to improve the workflow and these also help in reducing wasted motion. Organizing the workplace is the main purpose of this step. It should be easy to find and use each item. This step works on the concept in which there should be a place for everything, and everything needs to be kept in its place.
Shine or Sweep
Shine is related to cleanliness. There is a need for daily cleaning and removing all dirt, contamination from the workplace.
This includes eliminating variations from the process and for this, standard operating procedures (SOPs) and checklists are developed. Equipment and tooling are standardized to reduce the cost and time of cross-training. Deviations can be eliminated by training and re-training the team at work.
Sustain or Self-discipline
This consists of periodic review for recognizing the efforts and motivation of employees to sustain progress. Visuals are used wherever required for easy communication.
The two more Ss were added at a later stage by U.S. Managers i.e.
This consists of developing good safety practices among the above 5S activities.
Support or Maintenance
This includes reducing variability, costs, and any unplanned downtime.
Key Processes to Eliminate Waste
Below are the key processes used to remove the waste:
- Kanban (for material flow)
- Production of high quality
- Suppliers as partners
- Small and uniform workloads
- Reduced cycle time
- Total productive maintenance
- Flexible training and workforce
Kanban for Material Flow
Kanban refers to implementing a JIT manufacturing system to control material flow by utilizing cards. These cards support a work station in performing a particular function on materials. Kanban is a visible card and considered a “signal” in the Japanese language. Through these cards, required quantities are communicated at the customer’s point that is useful for the customer. In other words, the customer who is the operator next in line can decide upon the required units by him or her and can ask for the same. The card is received by the operator, and he/she should be able to produce that much quantity and supply. Similarly, using “Kanban”, the operator is able to make a demand on the predecessor and only the required quantity will be received by him/her. This is also termed a pull system.
So, the Kanban system helps in controlling the resource flow in a manufacturing process once the order is placed by the customer. This system facilitates eliminating waste in storing, handling, and delivering the product to the end-user.
Below are the benefits of using Kanban processes:
- It helps in controlling and triggering orders from defined locations
- Reduces both work-in-progress and inventory costs
- Improves inventory stock control
- Reduces the lead time in delivery
- Helps in visualizing the process demand
Production of High Quality
JIT production is considered for products that have repetitive quality in nature.
The origin of the system comes from giving a solution to a production process in which different parts are assembled to obtain the finished product. Such situations include the problems related to keeping the arrival of components, sub-assemblies, and parts to ensure that no shortage is there at the time of production. So, all parts must be of high quality to avoid unnecessary held-up of assembly. For the success of JIT, it is required to keep the inventories at the minimum and also, all components that are produced must demonstrate superior quality. With the help of production of high quality, waste of inventory space can be reduced up to the maximum extent.
Small and Uniform Workloads
In order to fulfill the need for a number of products, the manufacturing concerns are supposed to develop a number of parts. Most businesses practice the strategy of offering a different variety of products. It is not economical to produce all products in huge volumes and maintenance of stock at different distribution centers. Different input resources such as transportation, raw materials, storage put the system under a heavy burden. Also, there is a huge cost and operations involved in the process of transformation.
So, the best solution for this is to manufacture a variety of products in small quantities. The objective here is to reduce the stock by not losing business. This can best be done by putting a small load on different work centers, i.e., in-house facilities and related to subcontractors.
Suppliers as Partners
Those companies responsible for the supply of an organization’s manufactured products are termed as suppliers. Suppliers can act as either dealer for the companies or can indulge in some transformation activity on the materials that organizations deliver them.
In the case of a number of suppliers, the organizations can negotiate and choose the supplier offering the least charges to decrease the cost. Due to this, a few disadvantages are there to the organization i.e.:
- Less commitment to fulfill the needs of the organization
- The lack of an organization’s knowledge transfer to the suppliers for service improvement
- Chances of quality suffer
For JIT implementation, schedules are required to be changed often and for this, the production of few items can be delayed or hastened on a daily basis. Stockout positions or buildup inventories are the main concern in such situations. Difficulties arise due to communication problems. Below ways can be considered to ensure supplier cooperation and delivery of good quality supplies in a timely manner:
- Suppliers should be treated as a part of the business of the organization and information should be shared with them.
- Financial and technical assistance should be provided to suppliers.
- The support of suppliers should be taken for process improvement.
- Rapport should be made among the employees of the supplier company.
- Providing assurance of business.
Flexible Workforce and Training
Workers who are capable of doing multitasking are considered a flexible workforce. This multitasking can be done at their particular workstations or at those workstations where a different skill set is required than the skill set they use on daily basis. By considering this, there is a common provision of providing cross-functional training under JIT systems. Personnel training should be given by operational managers so that the skills of the workforce can be utilized once the shortage occurs and to avoid any stoppage in the work and disturbance in the workflow. This flexibility facilitates overcoming bottlenecks and ensuring better customer service. To meet unpredictable demand, regular workers that are specially trained can be deployed to take over tasks in which high skills are required and employees who are non-regular can be assigned simple jobs that they can handle without hampering production.
Total Productive Maintenance
In order to increase productivity in terms of required quantities with superior quality, equipment maintenance is considered a basic need. Usually, an operator conducts preventive and periodic maintenance and sometimes he/she takes the support of the supervisor. Through these activities, operations are able to understand the machine in a better way, and also, they can understand once the need for reconditioning or major repair occurs.
The worker is trained for the following in total productive maintenance:
- Maintenance of machines from any forced deterioration
- Keeping machine lubricated and clean
- Keeping a record of parts related to their replacement periodically
- Machine inspection for minor issues and adjustments
A worker is able to maintain a perfect order of his/her machines with the help of the above training. He/she is responsible for maintaining the machine and should be available to provide assistance to others once required.
Reduced Cycle Time
Cycle time is related to the time included in the completion of a set of operations or the time involved in the processes for converting input into the output. Cycle time can be reduced by removing delays and productivity improvement. This results in ensuring better utilization of resources and equipment.
For successful implementation of JIT and other development measures, the commitment of top management and an organization’s learning culture is required. The main issue in implementing any program is the resistance from organizational members and top management as well. This may lead to non-cooperation and generally, happens during the implementation stage. So, it is required to frame the objectives of each team in an effective way.
Pre-requisites for Implementation
There are some pre-requisites required for easy implementation and better results. Below are the requirements from the process of design to the performance measurement:
- Design flow process
- Total quality control
- Kanban Pull
- Work with vendor
- Stabilize schedule
- Reduce inventories
- Improve product design
Shop Floor Control
Realistic planning and scheduling use the frequency for changing setups for the purpose of managing the material flow and it leads to JIT manufacturing.
Single-Minute Exchange of Die (SMED) makes the production process flexible. Using the SMED method, the setup time on the machines can be reduced during the changeover of products. One another method to control material flow is the application of Kanban.
The characteristic of JIT purchase involves considering the purchaser as a participant in the activities of the organization.
Reducing inventory at all areas of the supply chain is considered a main purpose of JIT. As inventory is made by using machines, materials, and efforts of the workforce; therefore, it is considered a waste. There is a challenge to keep the inventory at a minimum level. For this, calculations related to below are required:
- Market demand forecast
- Equipment capacities
- Absenteeism of worker
- Lead times of supplier
- Quality related to product components
JIT Inventory and Supply Chains
The supply chain includes different entities such as departments, organizations, workstations in a particular sequence that manufactures and ensures the delivery of products or services. The starting point of this sequence is raw material suppliers and move further with the sequence including Transporters, Warehouses, Stores, Sub-stores, Machine centers, Packaging department, Wholesale dealers, retailers, and Final customers.
A value chain is created by the supply chain along its path. Different functions and activities such as forecasting, inventory, purchasing, inspection, retailing, production scheduling, and distribution move the material along the supply chain.
Examples of Just-In-Time (JIT)
Below are a few examples of renowned organizations that successfully adopted the JIT system:
Toyota Company is considered one of the most famous organizations to implement JIT manufacturing and also, it was one of the first organizations to adopt this system in an effective way. The raw material is brought to the production floor in Toyota once the order is received from the client. Until and unless it is not required, the parts are not added to the next node during the process. This helps in keeping the inventory to its minimum level that ultimately results in lower costs. This helps the organization meeting the demand of customers quickly without concerning the excessive inventory and its disposal.
Fast food brand McDonald’s, assembles and cooks the required items once the order is received except a couple of finished products. This facilitates making the process more standardized.
JIT is used by computer manufacturers for controlling the manufacturing and ordering of computer systems. Instead of filling the warehouse with pre-assembled computers, the orders are placed as and when customers make orders.