Just-in-time

JIT means producing goods and services exactly when they are needed, like for example.

A new company opens that is producing steering shaft for automobiles. The company,

under the JIT system, will set up the machines to produce the jobs in a row from those

who collect the metals at one end, all of the way to those who ship the product at the

other end of the factory. The people at each station, as they receive the product, take the

job order, perform their duties on the product, and then transfer the product out to the

next station after their work is completed. Along the way, the product is screened for

infirmities, and if they exist, the line is stopped until the defect is repaired. In the end, the

shipping agent will receive the product and ship it to the customer. All along the way,

the production never began until the order came in and then the goods were produced

from that point on out, and not sitting in inventory waiting on the already finished good.

L’Oreal, the world’s largest toiletries and cosmetics group, initiated was to reduce the

set-up times on the line which produces hair colorant from 2.5 hours to only 8 minutes.

These new change-over times mean that the company can now justify even prior to

change in set-up times, batch sizes was 30,000 Units; now batches as small as 2000 to

3000 units can be produced cost effectively (Slack and Chambers, Harland and Harrison,

and Johnston , 1998).

The underlying principle of JIT is one of continuous waste elimination and hence it is

universally applicable. Obviously, the manner in which JIT principles are applied across

different industries will vary. For example, in process industries, potential applications of

JIT philosophy would include implementation vendor development and JIT purchasing.

Furthermore the fundamental concept behind JIT manufacturing is getting the right

product to the right place at the right time. This is achieved by correctly timing the

supply chain so that as soon as a batch is processed, there is a new batch waiting to be

processed. A steady flow of unfinished goods through the various production levels

eliminates the need for extra materials to be kept in storage. In addition, JIT also

eliminates waste associated with labor and time. JIT is key element in leading to lean

production or lean system, which meant to turn higher productivity in an organization.

Lean systems utilize the pull, push or combination of both method of workflow. The push

i

method is applicable when the production of the item begins in advance of customer

needs. In push system, the emphasis shifts to using the information about customers,

suppliers and production to mange materials flows. Batches of raw materials are planned

to arrive at a factory about when needed to make batches or parts and sub-assemblies.

These assemblies are made and delivered to final assembly about when needed and

finished products are assembled and shipped about when needed by customers.

"Catch up with America in three years, otherwise the automobile industry of Japan will

not survive”. After 2nd world war, Toyota Motor Company’s Chief Engineer, Taiichi

Ohno began to examine the American industry and found that American manufacturers

made great use of economic order quantities, the concept of lot and batch, before

switching to another job, Ohno decided that waste that happened in America would have

to be decreased if he were to develop a technique for Japan, as what he describe as “war

on waste” so he proposed decreasing waste by making it were items only move through

production when they are demanded, “Jidoka” which is the Japanese concept or quality

program where inspection for problems would occur and stop the process until they were

repaired, thereby reducing waste. Jidoka was a great system in order to prevent cost of

quality by stopping at early stage of defects, and not only that, the system is also educates

the entire employees from top to down in production line in identifying the cause and

solutions. (Ettlie, 1990)

3M, manufacturing planners work with customer planners to develop strategies for each

customer segment. Changes in the manufacturing flow process lead to shorter cycle

times, meaning improved responsiveness to customers. (Lambert and Cooper, 2000).

IBM uses continuous flow manufacture; Hewlett-Packard Company uses stockless

production at one plant and repetitive manufacturing system at another, while many other

companies use lean production. Synchronized material flow is still another term used.

(Schonberger, 1998). JIT system improves the quality of the responsibility of every

worker and not just quality control inspectors, reduce scrap and rework, reduce cycle

times, lower setup times, smoothen production flow, decrease inventory of raw materials,

work-in-progress and finished goods, incur cost savings, force higher productivity,

increase worker participation, attracts a more skilled workforce, makes organization and

employees able and wiling to switch roles, reduces space requirements, and improves

ii

relationships with suppliers. Since its introduction in Japan, and later introduced in the

United States.Operations-based JIT concepts were correlated with both the product and

process focused quality initiatives, these two constructs interacted. Inventory-based JIT

concepts also interacted with product focused quality initiatives, suggesting that JIT

practices, implemented to manage inventory, also enhanced quality. Reducing lot sizes,

setup times and the supplier base, buying from JIT suppliers, and engaging in preventive

maintenance are all well-documented operations practices for improving quality levels

Therefore, the managerial implication here is that manufacturing firms should not ignore

JIT practices and concepts. Thus the strengths of JIT system is that it does reduce

overproduction, time spent waiting, transportation and movement of products, processing

time, inventory levels, and/or defects that are produced in a plant. These processes

thereby increase the profitability of an organization and make it leaner.

Improved transportation infrastructure is also reduces just-in-time (JIT) production costs.

JIT is a means of raising productivity and lowering costs for manufacturing. It relies on

tightly scheduled and frequent deliveries of supplies to reduce inventory needs and costs.

The success of JIT relies on being able to deliver, on the part of the companies, an

assured quality and quantity of goods without delay. The main thrust of JIT is a 'Quick

Response Strategy' to a swiftly changing market through organizational flexibility. JIT

thus advocates the organizational ability to deliver high quality products, respond rapidly

to changes in demand and be more cost-competitive. Therefore, it leads to higher

productivity in an organization. For example, Steve Millward is manufacturing director

for the Rainford Group in Coventry is the supplier of mobile telecommunication base

station structures to cellular companies in US, the company enjoys the rapid growth when

steve increased his focus on JIT operations toward the lean system, he re-arrange the

layout in the assembly areas so that the product flows along a defined assembly path,

with the provision Kanban (Japanese version of JIT), boxes between each operating

station. it means that one stage in the process will not progress a product until the next

stage really does need it. This will effectively control the level of work-in-progress on the

line, ensuring that the line will work at the pace of the slowest section. It will produce

goods only when they are actually needed, also using leveled scheduled in order to keep

the production rates of each model steady and to provide some predictability in the cells.

This analysis required to design the operation for JIT control involves balancing the level

iii

of activities at each station, so as not to create any bottle-necks. In this direction Rainford

Group can see clear benefits and opportunity to be productive. However, issues in JIT

system can be its streamlines processes and reduces any risky last minute changes, which

might be profitable. It is clearly understood that risk and profitability are inversely

proportional to each other, in that the less risk (which JIT virtually eliminates because of

the lack of uncertainty and that element of surprise and change), the less return the

organization can potentially receive. It makes an organization less able to maneuver and

change as it may be deemed profitable. What hampers successful JIT implementation is

the lack of clarity and priority leading to confusion and wasteful expenditure of

organizational energy. (Galloway and Azhashemi and Rowbotham, 2000)

iv

References:

Ettlie, J, E. (1990), ‘Manufacturing Strategy’, Kluwer Academic Publishers

Galloway, L and Azhashemi, M and Rowbotham, F (2000), ‘Operations Management in Context’ 2nd edn , Butterworth Heinemann.

Lambert, D.M and Cooper, M, C (2000), ‘Issues in Supply Chain Management’, Viewed at 05/1/2006, < http://hermanland.com:8080/blog/blog1/files/doc/issues_in_SCM.pdf>

Schonberger, J (1998), ‘Operations Management’ 6th edn, Irwin.

Slack, N and Chambers, S and Harland, C and Harrison, A Johnston, R, (1998), ‘Operations Management: Financial times’ 2nd edn, Prentice Hall P-560.

v