Guide: Just-in-Time
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Just in Time (JIT) is an efficiency-focused management philosophy that synchronizes a company’s material orders from suppliers directly with their production schedules. This approach, which thrived in post-war Japan and was honed by Toyota, minimizes inventory costs and reduces waste by ensuring materials arrive only as needed. The importance of JIT is precision in delivering the right items at the right time in the right quantities, a strategy that demands accurate demand forecasting and a keen understanding of production workflows.
Table of Contents
What is Just in Time (JIT)?
Just in Time, or JIT for short, is a management philosophy that aligns raw-material order requirements from suppliers directly with production schedules. Businesses use this strategy to increase efficiency and decrease waste by only receiving goods when they need them, “just in time”. This results in a reduction in inventory costs and associated costs of holding stock of materials, such as tying up working capital. Applying this method requires businesses to be able to forecast demand accurately.
Origins of JIT
JIT was originally developed in Japan during the era following World War Two, this was a time when resources were scarce. Toyota is credited with developing this approach, which became a fundamental component of the Toyota Production System (TPS). By applying JIT Toyota was able to compete more effectively with their global competitors by minimizing costs and enhancing product quality.
What are the Principles of JIT?
Just in Time has a range of principles to consider and is closely associated with the concept of lean manufacturing.
One of the key principles is to Eliminate waste (muda) One of the key 8 wastes is Inventory by implementing JIT you will effectively reduce inventory waste.
JIT encourages a culture of continuous improvement (Kaizen). This principle involves every employee in the process of finding and solving problems aiming to incrementally improve production efficiency.
JIT requires a principle of Synchronized production, with involves aligning production closely with customer demand and only producing what is needed when it’s needed and in the amount it is needed, removing another of the 8 wastes (overproduction).
With Just in time the principle of Strong supplier relationships is built as suppliers must be reliable and responsive, as materials need to be delivered directly to the production lines just as they are needed.
Built-in quality is also a key principle to the success of JIT and the goal should be to achieve zero defects so that extra materials are not stored for remakes.
Finally, Flexibility is a key principle needed for JIT as the JIT system required a flexible workforce with multi-skilled workers who can switch from task to task as needed. Flexibility in machinery is also required to handle a variety of production tasks without significant downtime between changeovers.
What are the Benefits of JIT?
There are many benefits of implementing Just in Time such a the mentioned reduction in Inventory costs which can include: less storage space is needed, and the costs of managing inventory, such as insurance and taxes, being reduced.
In addition to this, other benefits include:
Improved Quality: By focusing on quality in every aspect of production, JIT can lead to a reduction in defects. Early detection of problems means they can be addressed more quickly, reducing the need for rework.
Greater Efficiency: JIT helps to streamline production, reducing idle times between processes and minimizing the resources required to produce goods.
Better Responsiveness: With production tied directly to customer demand, companies can respond more quickly to changes in demand without holding large volumes of finished goods inventory.
Enhanced Productivity: Employees spend less time handling, managing, and retrieving inventory, freeing them to focus on productive activities that add value to the company and the customer.
Steps to Implementing JIT
Implementing JIT in most businesses will not be a quick activity and will likely need to be a strategic goal over time, and the elements involved require careful planning and usually take years to perfect. However, below is a brief outline of the steps that can be followed to implement Just in Time.
Step 1: Assess the Current State
The first step is to assess the current state and identify areas of waste. Using the lean methodology to identify the 8 types of waste can be done using a Value Stream Map to create a visual of the flow of materials and information throughout the business. This will highlight areas of inefficiency and waste.
Value Stream Map (VSM)
Another useful method at this time is to conduct benchmarking to measure the current levels of performance and create a baseline for future comparisons.
Step 2: Plan the JIT Strategy
The next step is to plan out the Just in Time Strategy. This will involve defining and setting clear and achievable goals for what you want to accomplish
It is useful to establish key metrics that will help you measure success, such as inventory turnover rates, cycle times, and quality rates.
Following this, you should develop a roadmap and outline the steps and timeline for implementation, including any capital investments required for changes in equipment or infrastructure.
Step 3: Train Your Workforce
Implementing Just in Time is not the work of one person or a small team. It requires an entire business to work together towards a common goal. This is why it is important to train the workforce in the concept of Just in Time and how everyone can play a role in the success of the business transition.
Step 4: Rework Your Layout
Next, you will need to rework the layout of the business to Optimize Flow this means arranging machines and workstations to ensure a smooth flow of materials to minimize transport and waiting times.
It is also beneficial to implement the 5S Principles if you have not already to further organize and manage the workspace.
And finally, ensure SMED has been implemented to reduce change over time. All three of these elements ensure an optimized and efficient process to turn raw materials into products for customers.
Step 5: Develop JIT Relationships with Suppliers
Once the business has optimized the process, the next step is to develop just-in-time relationships with suppliers. This can involve the selection of new suppliers who are capable;e of delivering the materials in a timely and reliable manner. Once the suppliers are selected, you should continue to work closely and collaboratively with them to plan schedules that align closely with your production needs.
You can use technology such as Electronic Data Interchange (EDI) to share information in real-time with suppliers to provide better coordination and communication and minimize supplier issues for the business.
Step 6: Test and Refine
This entire process is going to be iterative and is unlikely to work perfectly from the initial launch; therefore, it is going to be important to continue to test and refine all the elements of the process by continuously monitoring KPIs and holding regular reviews, then adapting and evolving the business as needed.
Conclusion
Implementing JIT excellence is iterative and demands ongoing attention and refinement. After assessing waste areas, planning strategically, training the workforce, optimizing physical layouts, and forging solid supplier relationships, the real work begins. It involves a continuous cycle of testing, monitoring, and refining processes. Businesses must remain vigilant, tracking performance indicators closely, and be willing to evolve their strategies to meet production demands precisely. The payoff of JIT implementation is a leaner, more responsive, and cost-effective operation that aligns closely with customer needs and market fluctuations.
References
- Aycock, J., 2003. A brief history of just-in-time. ACM Computing Surveys (CSUR), 35(2), pp.97-113.
A: Just-in-Time (JIT) is a production strategy aimed at maximizing efficiency by delivering products or materials precisely when they are needed. It focuses on minimizing waste, reducing inventory costs, and improving overall productivity.
A: JIT works by synchronizing production with customer demand. Instead of producing goods based on forecasts or schedules, JIT initiates production based on actual customer orders or demand signals. This approach minimizes inventory holding costs, reduces the risk of overproduction, and allows for more flexibility in responding to changing customer needs.
A: Implementing JIT offers several benefits, including reduced inventory carrying costs, improved production efficiency, shorter lead times, increased flexibility, enhanced customer satisfaction, and minimized waste. It can also lead to better coordination with suppliers, streamlined production processes, and cost savings through reduced setup times.
A: The key principles of JIT include waste reduction, continuous improvement, pull-based production, supplier collaboration, and streamlining of processes. These principles emphasize eliminating non-value-added activities, optimizing workflow, and ensuring that materials and products are produced only when needed.
A: JIT can be implemented in various industries and businesses, but its suitability depends on factors such as production volume, supply chain complexity, customer demand variability, and the ability to collaborate effectively with suppliers. While JIT can bring significant benefits, careful analysis and customization are essential to ensure its successful implementation for specific business contexts.
A: Implementing JIT can present challenges such as the need for accurate demand forecasting, maintaining close supplier relationships, potential disruptions in the supply chain, and the requirement for efficient production processes. Additionally, cultural changes, employee training, and resistance to change may also pose challenges during the transition to a JIT system.
A: To get started with implementing JIT, assess your current processes, identify areas of waste, establish strong supplier relationships, streamline production, implement pull systems, reduce setup times, emphasize quality control, foster a culture of continuous improvement, and monitor key performance indicators. It is recommended to seek expert guidance or consult with professionals experienced in JIT implementation to ensure a smooth and successful transition.
Author
Daniel Croft
Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website learnleansigma.com, a platform dedicated to Lean Six Sigma and process improvement insights.
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