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Just-in-time manufacturing: literature review and directions

Article  in  International Journal of Business Continuity and Risk Management · January 2012


DOI: 10.1504/IJBCRM.2012.045519

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Int. J. Business Continuity and Risk Management, Vol. 3, No. 1, 2012 57

Just-in-time manufacturing: literature review and


directions

Gurinder Singh*
Government Polytechnic College,
Mohali (Khoonimajra), Kharar-Landran Road, Kharar,
Mohali, Punjab, India
E-mail: gurgur2001@yahoo.com
*Corresponding author

Inderpreet Singh Ahuja


University College of Engineering,
Punjabi University,
Patiala 147 002 Punjab, India
E-mail: ahujaips@yahoo.co.in

Abstract: The purpose of this paper is to review the literature on just-in-time


(JIT) and to present a general survey of JIT implementation practices adopted
by the manufacturing organisations. The published literature has been deeply
analysed and arranged systematically in this paper. This paper examines the
evolution of JIT and its implementation in the organisations. Various strategies,
elements and important issues of JIT are discussed in detail. This paper also
highlights the contribution of JIT towards improving competencies of the
organisations. After going through a large number of papers written on the
subject, the JIT implementation practices employed by manufacturing
organisations all over the world have been extensively reviewed and analysed
in this paper. The approaches suggested by various researchers and
practitioners have been discussed and the reasons behind failure of JIT
programmes in the organisations have been critically evaluated. This paper also
discusses the success factors and facilitators of JIT implementation in an
organisation. This paper contains a comprehensive listing of publications in the
field of JIT implementation and various articles have been classified in
accordance with the attributes of JIT.

Keywords: just-in-time; JIT; inventory management, waste reduction, pull


manufacturing, push manufacturing, total productive maintenance; TPM; total
quality management; TQM.

Reference to this paper should be made as follows: Singh, G. and Ahuja, I.S.
(2012) ‘Just-in-time manufacturing: literature review and directions’, Int. J.
Business Continuity and Risk Management, Vol. 3, No. 1, pp.57–98.

Biographical notes: Gurinder Singh holds a Bachelor in Mechanical


Engineering from Guru Nanak Dev Engineering College, Bidar, Karnataka,
India and Master in Production Engineering from Guru Nanak Dev Engineering
College, Ludhiana, Punjab, India. Presently, he is working as a Lecturer in
Mechanical Engineering Department at Government Polytechnic College,
Mohali, Khoonimajara, Punjab, India. His main research area is just-in-time
manufacturing.

Copyright © 2012 Inderscience Enterprises Ltd.


58 G. Singh and I.S. Ahuja

Inderpreet Singh Ahuja holds a Bachelor in Mechanical Engineering and


Master in Industrial Engineering from Thapar Institute of Engineering and
Technology, Patiala, Punjab, India and PhD from Punjabi University, Patiala,
Punjab, India. Presently, he is working as a Professor in Mechanical
Engineering at University College of Engineering, Punjabi University, Patiala,
Punjab, India. His main research areas are total quality management,
just-in-time manufacturing and total productive maintenance.

1 Introduction

The manufacturing industries in the world have undergone a tremendous change in the
last three decades. Due to this there are drastic changes in management approach,
techniques used in production and process, expectations of customer, attitudes of
supplier, as well as competitive behaviour (Ahuja et al., 2006). In the highly dynamic and
rapidly changing modern era, the global competition among organisations has lead to
higher expectations from the manufacturing organisations (Miyake and Enkawa, 1999).
The global marketplace has witnessed an increased pressure from customers and
competitors in manufacturing as well as service sector (Basu, 2001; George, 2002).
Due to the rapidly changing global marketplace only those companies will be able to
survive that will deliver products of good quality at cheaper rate and to achieve their goal
companies try to improve performance by focusing on cost cutting, increasing
productivity levels, quality and guaranteeing deliveries in order to satisfy customers
(Raouf, 1994). Slow and steady improvements in manufacturing operations do not
guarantee sustained profitability or survival of an organisation in this fast-changing
marketplace (Oke, 2005). Thus, if the organisations are to become or remain leader, it
need to change strategies, improve product quality and reduce cost of production at a
faster rate than their competitors.
Increased global competition leads the industry to increasing efficiency by means of
economies of scale and internal specialisation so as to meet market conditions in terms of
flexibility, delivery performance and quality (Yamashina, 1995). The changes in the
present competitive business environment are characterised by profound competition on
the supply side and heightened fickle in customer requirements on the demand side.
These changes have left their unmistakable marks on the different aspect of the
manufacturing organisations (Gomes et al., 2006). With this increasing global economy,
cost effective manufacturing has become a requirement to remain competitive.
To meet all the challenges organisations try to introduce different manufacturing
techniques. Management of organisations devotes its efforts to reduce the manufacturing
costs and to improve the quality of product. To achieve this goal, different manufacturing
techniques have been employed. The last quarter of the 20th century witnessed the
emergence of three major programmatic operations improvement concepts that have
drastically changed the way manufacturing firms manage their operations. These were
just-in-time (JIT) production systems, International Standards Organization (ISO) 9000
certifications and total quality management (TQM) (Dreyfus et al., 2004).
Adoption of world-class, lean and integrated manufacturing strategies such as JIT
system leads to improvement of manufacturing performance (Fullerton and McWatters,
2002). With implementation of JIT companies can reap benefit like reducing costs,
Just-in-time manufacturing 59

meeting customer’s demands, stay ahead of competitors and minimise slack resources
that are critical for survival in the increasingly competitive market (Cobb, 1993). JIT
philosophy is based on the concept of delivering raw materials when needed and
producing products when there is a need. The focus is on minimising raw material,
work-in-process, and finished goods inventory with a view to cutting inventory costs and
also helping to expose other more serious inefficiencies (poor maintenance, inspection,
backlogs, etc.) in the manufacturing cycle (Vuppalapati et al., 1995). The fundamental
objective of JIT is to eliminate all waste from the entire supply chain through continuous
improvement (CI) (Frazier et al., 1988).
JIT has been developed by Taiichi Ohno (1982), Executive Vice-President of the
Toyota Motor Company and it spread to other companies of Japan in late 1970s. By the
early 1980s, JIT became a very popular manufacturing innovation in Western and Asian
countries (Schonberger, 1982b). It is an approach to continuous manufacturing
improvement based on the idea of eliminating all waste in the manufacturing process and
gaining edge over the others through improving the manufacturing process.

2 Evolution of JIT

In the early times, firms used to keep inventories to meet their future requirements and
the authors justified keeping inventory in the store. According to Khanna (1997),
inventory is the items of stores or material kept in stock to meet future demand of
production, repair, maintenance, construction, etc. It was thought that inventory is needed
as they help in smooth and efficient running of enterprises. There are various types of
inventory that are kept in the industry. Some of these are raw material inventories,
work-in-process and finished goods inventories. Raw material inventories are input that
gets converted to final output. These items are critical in nature, as any breakdown in
supply will result in production stoppage. The inventory levels will have to be fixed
taking into consideration various factors such as origin – local or imported;
availability – regular or seasonal; government regulations (if any). Work-in-process
inventories are materials in intermediate stage. Whereas finished goods inventory acts as
a cushion between the production and the sales department.
Keeping of inventory increases cost of product and reduces profits of any industry.
Industries tried to control their inventory levels from the early times so as to reduce the
cost of product and to enhance profits. Some features of different inventory classification
techniques used to control inventories are listed below in Table 1.
Shortcomings of the inventory control techniques in the past has affected the global
competition of an organisation to a great extent, thereby reducing the throughput and
reliability of production facilities, leading to fast deteriorations in production facilities,
lowering equipment availability, lowering quality of production, increasing inventory
levels, increasing cost of product, increasing waste thereby leading to unreliable delivery
performance (Ahuja and Khamba, 2008).
But in this era of competition, only those companies will be able to survive that will
deliver products of good quality at cheaper rate. Companies try to keep their edge over
the other company to survive and in the ‘70s, the Japanese were the ones who dominated
the world market by providing cheap and quality products. Drucker (1971) was the first
60 G. Singh and I.S. Ahuja

academic who recognised that Japan was a country from which Western companies could
learn.
Table 1 Features of different inventory classifications

S. no. Nomenclature Basis Main applications


1 ABC classification (always better Annual consumption Purchase
control) value management, store
management,
inventory control
2 HML classification (high, Unit price material To control material
medium, low)
3 XYZ classification Value of item in To review inventory
storage and their use
4 VED classification (vital, Criticality of the item Inventory control of
essential, desirable) the spare parts
5 FSN classification (fast, slow, Consumption pattern To control
non-moving) of items obsolescence and to
determine stock level
of components
6 SDE classification (scarce, Procurement problem Purchasing strategies
different, east to obtain)
7 GOLF classification (govt., Source of supply Procurement
ordinary, local, foreign sources) strategies
8 SOS classification (seasonal, Nature of supply Purchasing strategies
off-seasonal)

The oil crisis in 1973, lead to decline in economic growth and decline in profitability of
many companies. Due to this decline Japanese manufacturers started to think about the
methods to reduce the cost of their products, without compromising on quality and by
using existing financial resources, so that they can come out of financial crises. JIT was
the one of the methods evolved by Japan’s manufacturers to produce good quality
products at low price. The JIT process has been primarily applied to the manufacturing
industry. But nowadays JIT can be used in any type of organisation.

3 Literature review of JIT manufacturing

High inventory holdings are commonly identified as poor management (Boute et al.,
2004). JIT has been depicted as an inventory control technique and the Japanese Auto
Industry is recognised as the developer of JIT inventory and management philosophy
(Aghazadeh, 2003). It is a systematic approach which minimises inventory by having
supplies arrive at production and distribution points only when needed (Lee and Wellan,
1993). Hunglin and Wang (1991) claim that JIT production is a philosophy for reducing
work-in-progress (WIP) inventory, it aid process improvement and reduce process
variability. It can be seen as a new way of thinking, planning, and performing with
respect to manufacturing (Canel et al., 2000). Whereas Gyampah and Gargeya (2001)
consider JIT manufacturing both as a philosophy and disciplined method of production.
Just-in-time manufacturing 61

Stevenson (1996) defines the term JIT manufacturing as ‘a repetitive production


system in which processing and movement of material and goods occurs just as they are
needed, usually in small batches’. JIT implementing firms have to produce and deliver
finished goods JIT to be sold, sub assemblies JIT to be assembled into finished goods,
fabricated parts JIT to go into the subassemblies and purchased materials JIT to be
transformed into fabricated parts (Schonberger, 1982a). JIT philosophy is based on the
concept of delivering raw materials when needed; producing products when there is a
need, improve quality of product. The fundamental objective of JIT is to eliminate all
waste from the entire supply chain and to improve product continuously (Ptak, 1987;
Frazier et al., 1988).
The core of the JIT philosophy is CI through the elimination of waste (Chakravorty
and Atwater, 1995). Bicheno (1987) defines JIT as “to produce instantaneously with
perfect quality and minimum waste”. JIT in its broader sense is an approach of achieving
perfection in a manufacturing company based on the continuously elimination of waste.
In the narrow sense, JIT refers to the movement of material at the necessary place at the
necessary time (APICS, 1987). It is a disciplined programme for improving overall
productivity and reducing waste (Voss, 1988). In a JIT environment quality parts in the
right quantity and at the right time are produced, while using a minimum amount of
facilities, machinery and equipment, raw and in-process materials and human resources
(Schlesinger and Heskett, 1991).
Table 2 Broad classification of waste

Japanese nomenclature English meaning


1 Muda Unproductive
2 Mura Unevenness
3 Muri Overburden

Table 3 Types of Munda waste

Abbreviation Impact on performance of an organisation by eliminating


Name of waste
of waste waste
T Transportation Establish layout to minimise transport and handling.
I Inventory Reduce the waste of stocks in all production areas (raw
material, WIP, finished goods).
M Motion Study motion for improved economics, productivity and
quality.
W Wait Synchronise work flow and balance loads through flexible
workers and equipment.
O Over-processing Use value analysis production. Processing may be totally
or partially unnecessary and capable of being eliminated.
O Over-production Reduce setup time, compact layout and improve shop
floor visibility
D Defects Build in processes to eliminate defects in the process.

According to Potts (1986), and Banerjee and Kim (1995), JIT is a philosophy
directed towards the elimination of waste, where waste is anything which adds cost but
62 G. Singh and I.S. Ahuja

not value to a product. It is a system driven by final product demand where each item
is procured, manufactured, and delivered in the quantities needed JIT to satisfy
demand in the next stage of the supply chain system or in the marketplace (Sadhwani
et al., 1985). Thus, waste is anything associated with the production process that
does not add value to the final product. Thus, waste includes quality defects,
inventories of all kinds, time spent to move material and time spent setting up machines
(Demmy and Gordon, 1988). Toyota Production system has given three broad types
of waste and these are shown in Table 2. Munda waste has been given more importance
than the other two types of waste. Munda waste is of seven types and is depicted in
Table 3.
Younus (1991) in his research work has been identifies 12 types of waste and these
are handling, movement, over-production, scrap and rework, idle time, setup times,
transportation the process itself, material or sub-assemblies, rework, improper order
and arrangement, miscommunication. This waste is any form is required to be
eliminated. The elimination of waste is achieved through internal elements
(manufacturing systems, human resources) and external elements (suppliers, other
organisations with close relationships with the manufacturer) (Keller and Kozazi, 1993).
Wallace (1990) also considered JIT as a path to attain excellence in a manufacturing
company based on continuing elimination of waste and constant development in
productivity. Continuous monitoring of production processes with the goal of eliminating
all forms of waste is a key point in understanding JIT. JIT can be depicted as an operating
concept designed to eliminate waste (Chase et al., 1998; Hernandez, 1989). The
American Production and Inventory Control Society (APICS, 1987) define JIT as: A
philosophy of manufacturing excellence based on pursuit of the planned elimination of
all waste and consistent improvement of productivity. It encompasses the successful
execution of all manufacturing activities required to produce a final product from
design engineering to delivery and including all stages from conversion of raw material
onward.

Figure 1 Elimination of waste using 5S


Just-in-time manufacturing 63

Ehrhardt (1997) considered JIT as a pull system, in which a production process pulls
material from a prior process (which does not operate unless there is need for its output)
in support of the final assembly schedule, which is closely coordinate with customer
demand (Ehrhardt, 1997). A common example of pull production system that is used in
industries is Kanban system. JIT is the classic pull system. The basic fundamental is that
production at one level only happens when request is initiated at the higher level.
Other pull systems other than Kanban system given by Hyer and Wemmerlov (2002)
are paired-cell overlapping loops of cards with authorisation (POLCA), constant
work-in-progress (CONWIP) and drum-buffer-rope (DBR). Figure 2 explains pull
strategies.

Figure 2 Pull strategies (see online version for colours)

Demand driven
Production and
distribution

Applied where
No inventory demand uncertainty is
high
Pull strategies

Difficult to implement
Decrease in lead time

Where as a push system supports batch manufacturing operations. In batch


manufacturing, a schedule prepared by taking into consideration the lead times of various
components and subassemblies is released by the material-planning department of an
organisation (Vollmann et al., 1997). Estimating release lead-times, modelling future
requirements for different products, determining the safety lead-times and stock have
been the key issues identified by Krishnamurthy et al. (2004) in modelling a push system.
Push system is also known as material requirement planning (MRP). Various push
strategies are shown in Figure 3.
JIT is a management philosophy or toolbox of techniques based on making a
significant improvement in operating efficiency through reduced inventory levels, lead
times and overheads (Grahame, 1998). But JIT is essentially more of a philosophy than a
series of techniques, the basic aim of which is to reduce cost by restricting the
commitment to expenditure in any form, including manufacturing or ordering materials,
components, etc. (Sohal et al., 1989). Heeley (1991) considers JIT as a state of mind for
achieving competitive excellence by creating an attention to CI through 100%
64 G. Singh and I.S. Ahuja

involvement to eliminate all waste, institutionalising only value adding activities with
100.

Figure 3 Push strategies (see online version for colours)

4 Need of JIT in contemporary manufacturing scenario

Reference literature has revealed that the manufacturing organisations worldwide are
facing many challenges to achieve successful operation in today’s competitive
environment. Many organisations are using different techniques to reduce their cost of
production so that they can compete with others. It is agree that the objectives of JIT are
to remove waste and to enhance the flow of materials. Once this is accomplished, costs
can be lowered, quality enhanced and the firm becomes more flexible. Application of JIT
results in competitive advantage (Fuller, 1995).
The typical topics covered under JIT include the system’s operating procedures and
characteristics, implementation strategies, and benefits (theoretical and actual) such as
efficiency improvements, cost savings, quality improvements, and modifications of the
supplier/producer relationship. On the whole, they present JIT from a perspective that has
an economic focus (Peters and Austin, 1995).
The JIT system is driven by final product demand, where each item is procured,
manufactured, and delivered in the quantities needed JIT to satisfy demand in the next
stage of the supply chain system or in the marketplace (Sadhwani et al., 1985). It is
widely accepted that the implementation of JIT can improve firm performance.
Schonberger (1986) provides anecdotal evidence that companies have substantially cut
lead times, drastically reduced raw material, work-in-process, and finished goods
inventories, and effectively increased asset turnover. Implementation of JIT in an
industrial organisation is based on two principles, elimination of waste, and utilisation of
men, machine and material to its optimum levels.
Just-in-time manufacturing 65

Table 4 Effect of JIT implementation on various factors

Factors facilitating JIT Effect of JIT Implementation


Process Elimination of waste
Reduction in waste
Reduce lot size
Reduce lead-time
Automation
Kanban
Production strategy
Reduced setup times
Stable production
Preventive maintenance
TPM
Kaizen
Group technology
Quality control and improvement
Continuous quality improvement
Halt production line
Statistical process control
TQM
Quality circles
Management Management commitment
Management participation and commitment
Increase workers’ morale
Reduction in labour turnover
Incentive to worker
Job security
Workers Workers commitment
Employee suggestions
Flexibility of employee
Long working hours
Suppliers Vendor/supplier participation
Quality parts
Reliable and prompt deliveries
Small lot size
Communication with suppliers
Long-term contract
Supplier training
Single source supplier
66 G. Singh and I.S. Ahuja

Figure 4 Need of JIT (see online version for colours)

The following factors necessitate implementation of JIT in the contemporary


manufacturing scenario:
• need to remain competitive globally
• to satisfy global customers
• to eliminate threats faced by organisation from tough competition, increase of raw
material costs, energy costs and globalisation
• improve the work culture and mindset of organisation
Just-in-time manufacturing 67

• to increase the efficiency of the workers by providing them training, incentive and to
make each worker multi-skilled
• to improve the quality of product
• to reduce the cost of product
• to ensure that minimum breakdowns should occur in the industrial organisation
• to ensure that each part is to be procured or produced as and when required so as to
reduce waste
• inventory levels and lead time in an industrial organisation should be reduced to
minimum
• there should be optimum utilisation of men, machine and material.
There are many factors that facilitate JIT manufacturing and the effect of these factors on
JIT implementation is depicted in Table 4.
The need for JIT in an organisation is highlighted in Figure 4. From the figure, it is
clear that globalisation leads to competition in an organisation. To meet this competition
organisations use modern techniques of manufacturing. According to Maskell (1987), the
world of manufacturing is changing so fast that there seems to be a new buzzword every
day and a new concept every couple of weeks. There are some factors that facilitate JIT
and ultimately organisation reaps the benefits of JIT.

5 Relationship of JIT with other manufacturing practices

JIT production is called by many names like Zero inventory production system,
Minimum inventory production system, Kanban production, Kaizen production, stockless
production, pull through production, and quick response inventory system (Biggart and
Gargeya, 2002). It is system that produces the required items at the time and in the
quantities needed (Gunasekaran and Lyu, 1997).The main aim of JIT is to produce the
parts used for subassemblies JIT, to assemble these parts into subassemblies JIT, to bring
together these subassemblies to form assemblies JIT and ultimately deliver finished
goods JIT, so as to eliminate waste, to maintain quality and to satisfy customers. The
achievement of all these goals is possible if JIT is implemented along with the other
manufacturing techniques. There are a number of manufacturing techniques and
philosophies used by the organisations. The adoption of philosophies such as JIT, TQM,
benchmarking (BM), business process reengineering (BPR) and CI has in most cases led
to operational and strategic gains for manufacturing and service organisations in
particular (Yasin et al., 2004b).
JIT is a backbone of lean manufacturing system. For long people associated JIT only
with the process of manufacturing, but in actual practice JIT consists of JIT purchasing,
JIT manufacturing and JIT selling. Ahuja and Khamba (2008) have depicted a direct
relationship between JIT and lean manufacturing philosophies (Figure 5). From this
figure, it is also clear that JIT plays a vital role in lean manufacturing. The relationship of
JIT with other manufacturing philosophies or practices is also depicted in figure.
68 G. Singh and I.S. Ahuja

Figure 5 Relationship between JIT and lean manufacturing

Enormous attention has been given to JIT and TQM by many organisations all over the
world to improve their competitiveness. Vuppalapati et al. (1995) discussed relationship
of JIT with TQM. The connections between JIT and TQM from conceptual,
philosophical, and implementation perspectives are examined. It is summarised that
implementing both JIT and TQM jointly will outperform the organisations that have
implemented only one of these, or none. Figure 6 has explained three views about JIT
and TQM implementation.

Figure 6 Three views of JIT-TQM implementation (see online version for colours)
Just-in-time manufacturing 69

Venkatesh et al. (2007) have discussed relationship between three letters syndrome for
revitalising manufacturing. The three letter syndromes in manufacturing are mentioned as
JIT, TQM, total productive maintenance (TPM), supply chain management (SCM) and
theory of constraints (TOC). The relationship between above mentioned manufacturing
techniques with performance of manufacturing is discussed. The theoretical framework
of relationship of these techniques is shown in Figure 7.

Figure 7 Theoretical framework

There are some TQM related JIT practices and these are total quality control, quality
circles, value analysis, integrated product and process design, total productive and
preventive maintenance, workplace organisation plan (Sandanayaka et al., 2008).
JIT is also associated with Kanban. Kanban is another name of JIT material flow
system. It is a pull based system. Flow of material in an industrial organisation is
classified into two types, push and pull systems. The Kanban system is typical pull
system while most conventional systems are push systems (Karmarkar, 1989). The basic
difference between pull and push is that a pull system initiates production as a reaction to
current demand, where as push system initiates production in response to expected,
forecasted, future demand.
Singh et al. (1990) discussed a case study about implementation of Kanban system.
The lead-time between the entries of the parts to the completion of the assembly
operation was reduced because the materials would not be delivered to the usage area
until they were needed.
From the above studies, it is clear that JIT bears a direct or indirect relationship with
other manufacturing practices. If JIT is implemented with the other manufacturing
practices results are much better that applying JIT alone in the industrial organisation.

6 Prerequisites for JIT

There are four major areas to be looked after for the implementation of JIT successfully
and these are inventory, production, quality and customer’s relation. Schermerhorn
(1996) has put forth the theory that the effectiveness of JIT implementation hinges on a
wide range of special support that includes: high quality supplies, strong management
commitment, a manageable supplier network, geographic concentration, efficient
transportation, and materials handling.
Before a manufacturing or service organisation can enjoy the fruits of JIT, the firm
must accept JIT as an organisational philosophy. This may require the organisation to
change or modify its operating procedures, its production or service systems and in most
70 G. Singh and I.S. Ahuja

cases its organisational culture (Yasin et al., 2004a). Figure 8 explains the modifications
in an organisation prior to JIT implementation.

Figure 8 Organisational modifications prior to JIT implementation

Main aim of JIT manufacturing is to reduce inventories. Maskell (1987) mentioned four
types of inventory procurement problems and their solution.
Table 5 Inventory procurement problems and their solutions

Problem Solution
Supplier lead times Closer supplier relationships
Inflexible production planning Closed-loop MRP-II system
Large batch sizes Reduced setup time
Long queue times Plant layout and MRP-II

Cooperation of supplier is a vital first step for inventory control. Industrial organisation
can reap benefits of JIT if suppliers will give industrial organisation shorter lead
times, deliver smaller quantities more often, guarantee a low reject rate and perform
quality-assurance inspection at source. More frequent deliveries of smaller quantities of
material supplied by supplier should be such that each delivery should be just enough to
meet organisation’s immediate production schedule. This will keep inventory as low as
possible. It is often thought that component manufacturers who supply on a JIT basis
must be located in close proximity, and certainly within the same customs region, as the
end-product manufacturer (Rooks, 1989).
Peters and Austin (1995) are of the view that JIT suppliers are considered partners
with the JIT firm. The relationships between the firm and its suppliers are expected to be
long-term. Since the supplier is a vertical extension of the JIT firm’s operations system,
the stake in the JIT firm increases for this stakeholder group. To develop and support
relationships of this intensity, it is usually necessary for JIT firms to reduce their supplier
bases.
JIT production requires high quality, small lot sizes, and frequent delivery of raw
materials. A good relationship with suppliers is crucial to achieve these requirements. For
example, the Japanese make their vendors seem like the next level below the start of
production (Zhu and Meredith, 1995). It is clear that if any industrial organisation has to
apply JIT then they have to improve their relations with suppliers/vendors so that they
can get their raw material inventories well in time.
Just-in-time manufacturing 71

Another factor that needs attention prior to implementation of JIT is production and
quality control. To improve the production and to control quality most important factor in
the implementation of JIT is culture. The culture is further sub divided into two parts, i.e.,
workers culture and management’s culture. The workers should be totally committed to
their work and company. They should be ready to work for long hours if needed, loyal to
their organisation, cooperative, flexible. The management should also be loyal to their
workers, provide them training, give incentives, job security, and involve them in
decision making.
Ramarapu et al. (1995) emphasised that success of JIT in Japan is due to the
culture of their workers and management. Workers in Japan are loyal, cooperative,
flexible and willing to work long hours whenever there is need. Management of Japan is
also characterised by life-time employment, approaching decision making from the
bottom-up, respect for their workers, and a paternalistic approach towards workers. This
distinction between workers and managers has helped Japanese management implement
JIT successfully.
Process improvement and maintenance of equipments are also required before
implementation of JIT. For successful implementation of JIT, equipment of the industrial
organisation should be well maintained and function properly. For this industrial
organisation should have to use latest manufacturing techniques and improve the process
regularly. Duclos et al. (1995) described that as part of JIT implementation, organisations
must instill the habit of expecting continuous small improvements in the process. CI or
Kaizen indicates that there is no best, there is only better. The concept of CI involves a
change in attitude towards the overall effectiveness of an organisation. The purpose is to
develop everyone’s attitude in doing the simple things correctly with gradual
improvement (Chandra and Kodali, 1998).
One of the manufacturing techniques that are to be used for the improvement of
equipment efficiency is TPM. TPM is a maintenance management programme with the
objective of eliminating equipment downtime. TPM is an innovative approach to plant
maintenance that is complementary to TQM, JIT manufacturing, total employee
involvement (TEI), continuous performance improvement (CPI), and other world-class
manufacturing strategies (Schonberger, 1986) There are some conditions to implement
the JIT system with success, and these are uniform production rate (to ensure schedule
stability), a pull control system, small lot sizes, quick and economic setups, high quality
levels, preventive maintenance, supplier long-range relationships, etc. These conditions
are called the JIT elements and are presented by several authors, among which are
Gargeya and Thompson (1994), Zhu and Meredith (1995), Spencer and Guide (1995),
and Ramarapu et al. (1995).
Implementation of quality control techniques in an organisation can also lead to
realisation of intangible benefits in the form of improved image of the organisation,
leading to the possibility of increased orders. For the maintenance of quality, TQM is
used nowadays. TQM, in its simplest form, encompasses all actions, values and beliefs of
an organisation which aim to improve and maintain quality standards. Maintaining and
improving quality is an integral part of JIT (Chandra and Kodali, 1998).
Customer’s relation also plays a vital role in implementation of JIT. Holweg and
Pil (2004) emphasise the importance of build-to-order strategies to enable
responsiveness to customer demand. The principles and philosophies of JIT are depicted
in Figure 9.
72 G. Singh and I.S. Ahuja

Figure 9 Principals and philosophies of JIT (see online version for colours)

7 JIT strategies

Since JIT is a philosophy of management whose objective is complete elimination of


waste from a productive system, it is adaptable to any productive system – a
transportation system, an administrative system, or a manufacturing system (Daugherty
and Sprencer, 1990). JIT production system is based on principles of elimination of
waste, improvement of quality, participation of workers with positive attitude, attitude of
management towards worker and relationship with vendors and customers. Need of JIT is
to eliminate or to reduce all kind of inventories whether it is raw material, work in
process or finished goods inventories. Ohno (1982) identifies seven types of waste and
recommends methods for their elimination; over-production: reduce setup time, compact
layout and improve shop floor visibility; waiting: synchronise work flow and balance
loads through flexible workers and equipment; transportation: establish layout to
minimise transport and handling; processing: use value analysis production; processing
may be totally or partially unnecessary and capable of being eliminated; storage: reduce
the waste of stocks in all production areas (raw material, WIP, finished goods); motion:
study motion for improved economics, productivity and quality; making defective
products: build in processes to eliminate defects in the process. JIT has three main goals,
elimination or reduction of all kind of inventory, exposing process inefficiencies in
Just-in-time manufacturing 73

manufacturing process and reducing/elimination of these inefficiencies by using latest


manufacturing techniques.
From Figure 10, it is clear that JIT strategies are having three broad aspects, i.e., JIT
purchasing, JIT production and JIT sales.

Figure 10 Strategies of JIT (see online version for colours)

8 JIT purchasing

The JIT concept as applied to purchasing translates into frequent releases and deliveries
(Schonberger and Gilbert, 1983). So JIT purchasing requires frequent, reliable deliveries
in exact quantities (Gupta, 1990). In today’s competitive markets, close cooperation
between the vendor and the buyer is necessary to reduce the joint inventory cost and the
response time of the vendor-buyer system (Yang et al., 2007). Lorefice (1998) stressed
that a sort of partnership has to be established among supplier and customer in order to
involve the latter into the efficient process of JIT. Most relevant factors for the selection
of suppliers are not price but to eliminate defective goods from production cycle and
improved quality turn outs. The selection of supplier should be based on the criteria such
that there should be minimum waste, minimum inspection, minimum freight costs (with
geographic proximity), minimum paperwork and small and frequent lot size delivery.
Despite the importance of frequent small lot deliveries from nearby suppliers, the quality
assurance became the most important prerequisite to establish a relationship with a
company that works JIT. Company working with JIT should also pursue the ‘one supplier
per product’ objective. To assure a close relationship with the upstream partner, the
company has to be able to open its doors to the new link of the production chain
(Lorefice, 1998).
JIT suppliers are considered ally with the JIT firm (Wong and Johansen, 2006). The
association between the firm and its suppliers are supposed to be long-term. Since the
supplier is a vertical extension of the JIT firm’s operations system, the stake in the JIT
firm increases for this stakeholder group. To develop and support relationships of this
intensity, it is usually necessary for JIT firms to reduce their supplier bases. In the
extreme case, single sourcing may be used (Peters and Austin, 1995).
Ansari and Modarress (1988) list the following activities as major JIT purchasing
practices: small purchase lot sizes delivered in definite quantities compared to traditional
large batch delivery; few suppliers, ideally one per component or family of parts rather
than multi-sourcing; selection of suppliers and their evaluation is based on quality and
delivery performance as well as price; quality inspections are performed at the supplier’s
location instead of traditional method of incoming inspection; more freedom is given to
74 G. Singh and I.S. Ahuja

supplier to design specifications; no annual rebidding compared to traditional frequent


retendering; packaging is changed to encompass standard containers; paperwork reduces
and becomes more informal.

Figure 11 JIT purchasing strategies (see online version for colours)

Figure 12 Measures of JIT purchasing practices

Note: Arrow marks indicate sequence of activities. Causality is not implied.


Just-in-time manufacturing 75

Schonberger and Gilbert (1983) are of the opinion that the supplying plant does not need
to carry much buffer stock unless they sell capacity to other plants, in which case buffer
stocks would be necessary to maintain JIT deliveries and therefore, JIT purchasing works
best if the vendor supplies to one customer. Aslı and Nursel (2011) are of opinion that
supplier selection and supplier performance evaluation are necessary tools for successful
JIT implementation.
Shin et al. (2000) listed the various criteria to evaluate performance of supplier: these
include lead times, on-time delivery, delivery reliability, quality, and cost.
Giuniperio et al. (2005) in Figure 12 has suggested measures of JIT purchasing
practices.

9 JIT production

In a JIT production system, earliness and tardiness must be discouraged as early finished
jobs increase inventory cost while late jobs lead to customers’ dissatisfaction and loss of
business goodwill (Wong et al., 2006). Customers need products of good quality at right
time. To produce product of quality, latest manufacturing techniques are used. There are
three main factors that contribute to JIT production: workers, management, and process.

9.1 Workers
The main aim of JIT is to reduce waste and eliminate inventories throughout the process.
Peters and Austin (1995) pointed out that reduction of buffer inventory between process
stages means that closer integration and synchronisation are required. Due to this
reduction in inventories without compromising with quality an operator’s latitude and
freedom are reduced, creativity and motivation may in turn also be reduced. So the
operators are helped to achieve reductions in waste and cost by enhancing their skills and
each worker should be allowed to participate in the production/service process. Thus, the
workers will get a chance to make suggestions, propose improvements, and receive
awards (Monden, 1993).
A very high quality standard is required for all materials for JIT to function properly.
One programme that is used to attain and maintain high quality is self-stopping.
Operators have the responsibility to stop their operation if they feel that there is a
condition that adversely affects product quality. Before restarting the system, the affected
operators and managers are expected to identify the root cause of the problem and take
corrective action (Peters and Austin, 1995). Worker has to perform many duties at a time
for the success of JIT. Peters and Austin (1995) listed following additional duties to be
performed by the worker/operator: performing several different jobs; maintaining
production and inventory control; inspecting their own work; reworking of their own
non-conforming (defective) parts; setting up production equipment; executing preventive
and light maintenance of their production equipment; receiving or giving training both on
and off the job.
In a JIT environment, if machine is operated just for eliminating of idle men or
machine, considered as waste. Nothing can be produced until there is a need from the
downstream operation. So the idle workers are kept busy by running several machines,
since each worker is trained to operate multiple machines and to perform multiple jobs
76 G. Singh and I.S. Ahuja

(Zhu and Meredith, 1995). To achieve all these goals cross-training of worker is very
essential. According to Zhu and Meredith (1995) Cross-training is necessary when
workers are encouraged to operate multiple machines. Cross-training operationalise the
idea of job enrichment that brings more responsibility in quality of products to a person
who is producing them. Consequently, quality can be improved as a worker gets more
involved in a production process.

9.2 Management
As the operators take on more responsibilities, managers must relinquish some of their
traditional responsibilities. The operations manager becomes more of a coach and adviser
to the operators or their teams (Peters and Austin 1995). Evans et al. (1990) suggest that
JIT implementation be initiated from the top, with full support of all managerial levels.
Since implementing JIT pushes a lot of changes to be taken place in an organisational
structure, it is very important to understand that the change may require people to think
and view things in a totally different way. Training should concentrate on basic
understanding of the technical aspects of JIT and the impact that JIT will have on the
operating environment. JIT implementation cannot be successful without top
management commitment. Management must be willing to devote the resources which
are necessary to support an implementation such as JIT education and training (Zhu and
Meredith, 1995). Chong et al. (2001) mentioned following types of organisational
support: top management support; middle management support; first line supervisor
support. According to Chandra and Kodali (1998), the management commitment to a JIT
manufacturing system must start from the topmost level in management and flow down
through all levels of the company. Top management should act as shapers and coaches. It
must support the workforce by eliminating obstacles to progress.

9.3 Process/production
For the success of JIT process/production strategies also plays an important role.
According to Davy et al. (1992), JIT production includes following factors: focused
factory; reduced setup times; group technology; total preventive maintenance; uniform
workloads; Kanban; total quality control; quality circles. Few of the factors that improve
process/production while implementing JIT are discussed below.

9.4 Focused factory


The focused factory is a grouping together of operations to achieve a specific goal and is
appropriate for manufacturing of several distinct products. Manufacturing operations are
combined into a series of mini factories, where lead times, setup times, cycle times,
inventory and manufacturing wastes are significantly reduced (Chandra and Kodali,
1998).

9.5 CI (Kaizen)
Kaizen indicates that there is no best, there is only better. The concept of Kaizen involves
a change in attitude towards the overall effectiveness of an organisation. The purpose is
to develop everyone’s attitude in doing the simple things correctly with gradual
Just-in-time manufacturing 77

improvement (Chandra and Kodali, 1998). Kaizen was changed to gaichu Kanban (the
process where production is only executed on receipt of an order) in 1960. The meaning
of ‘gaichu’ is ‘order’, and ‘Kanban’ means the written instructions for parts which are
sent from a post-process to a pre-process or a parts supplier, when a part is required
(Kaneko and Nojiri, 2008).

9.6 Group technology


Group technology is an engineering and manufacturing philosophy which identifies
the sameness of parts, equipment or processes. For the purpose of manufacturing
and design, similar parts are identified and grouped by it. Various machines are
grouped according to the routing required for a family of parts rather than by
their functions (Bennett, 1986; Burbidge, 1989). Group technology was first discussed
by Flanders (1925) since then, it has been extensively used and developed in the
former USSR, followed by Europe and Japan (Huang and Houck, 1985). According
to Chase and Aquilano (1992), group technology is a technique of grouping
machines which perform different tasks together into one work cell so that these tasks
can be performed without moving a large number of work-in-process inventories
between departments. This scale measures the use of manufacturing cells, machine
and process layout, and the use of equipment designed for flexible floor layout. The
shop-floor layout must allow streamlined flow of production, and manufacturing cells
and group technology are utilised to help the materials and parts move fast from one
work centre to the next. One of the applications of group technology is cellular
manufacturing.

9.7 Cellular manufacturing


According to Ballahur and Steudel (1987), ideally, a cell is a group of dissimilar
machines physically located in close proximity such that a part is processed from start to
finish in a single or continuous flow. Cellular manufacturing is one of the best techniques
with which to implement JIT systems and total quality control (Dicasali, 1986; Welke
and Overbecke, 1988). So the aim of cellular manufacturing is to reduce setup and wait
times and enhance the flexibility of the manufacturing environment (Welke and
Overbecker, 1988).

9.8 Total productive maintenance


Preventive maintenance is needed to provide a smooth production flow. Maintenance and
minor repairs are considered a part of line workers’ job requirements Zhu and Meredith
(1995). An organisation without preventive maintenance operates heavily under the risk
of facing accidents, safety problems, substantial repair costs and out-of-control
manufacturing processes. Preventive maintenance is not solely the responsibility of one
individual department. Effective maintenance policies such as preventive maintenance,
TPM, etc., are implemented and practiced by a significant number of manufacturing
industries (Chandra and Kodali, 1998). TPM is a unique Japanese philosophy, which has
been developed based on the Productive Maintenance concepts and methodologies. This
concept was first introduced by M/s Nippon Denso Co. Ltd. of Japan, a supplier of
78 G. Singh and I.S. Ahuja

M/s Toyota Motor Company, Japan in the year 1971. TPM is an innovative approach
of maintenance that promotes autonomous maintenance by operators and optimises
equipment effectiveness, eliminates breakdowns (Bhadury, 2000). TPM is a
manufacturing programme designed primarily to maximise equipment effectiveness
throughout its entire life through the participation and motivation of the entire work force
(Venkatesh et al., 2007).

9.9 Automation

The organisation must have a systematic integrated automation strategy and invest in
modifying process layout accordingly (Yasin and Wafa, 1996).

9.10 Heijunka (smooth build up rate)

Heijunka means the rate of production should be as smooth as possible. JIT systems often
try to smooth the build-up rate over a stipulated period. To achieve this, JIT systems
often resort to under-capacity scheduling, so that they could respond to demand changes
by essentially smoothing production, and by holding down to minimum deviations from
the schedule (Chandra and Kodali, 1998).

9.11 Reduced setup time

Setup time is the down-time of an operation to change from one part or product to
another. Reduction of setup time entails reduction in lead time, which in turn enables the
company to be more responsive to market changes and customer needs (Chandra and
Kodali, 1998). By reducing setup time, smaller run quantities become economically
feasible, manufacturing lead times fall, lead times variability is reduced, quality is
improved, and shop floor flexibility is greatly enhanced. Through the setup reduction,
capacity that is previously consumed by setups can be freed up and made available for
production.

9.12 Push system

Push systems are projections of schedule based demand, i.e., what is expected to be?
Based on historical information (updated on a week or monthly basis) a detailed
sub-schedule for buying materials and producing goods are initiated. It is this
schedule what pushes the production in order to comply with the expected demand
(Lorefice, 1998). In a push system multi-period schedule of future demands for the
company’s products (called a master production schedule) is prepared. The computer
breaks that schedule down into detailed schedules for making or buying component
parts. It is a push system in that the schedule pushed production into making the
required parts and then pushing the parts out and onward. The name given to this
push system is MRP (Schonberger, 1982a). Singh et al. (1990) explained that a weakness
of MRP is that there is some guesswork involved. One need to guess what
customer demand would be in order to prepare the schedule. Thus, bad guesses would
result in excess inventory of some parts.
Just-in-time manufacturing 79

9.13 Pull system


In a pull system, the production of a certain product starts on the demand or request made
by the buyer. The consumer of the product is the one that pulls from the last link of the
production chain, this last link pulls its preceding and so on (Lorefice, 1998). Where
companies employ traditional push systems (e.g., Compaq and Hewlett-Packard)
financial risk increases because inventory value inputs, WIP, and final goods inventories
frequently lose value with each day they are held due to decreasing product lifecycles and
a positive cash-to-cash cycle (customers pay for products when they take possession).
Companies that utilise push-based systems frequently attempt to minimise risk by
postponing final product assembly until products reach local distributors who are
responsible for final product configurations (Papadakis, 2003).
As stated by Kimura and Terada (1981): “In the pull system, there is certain amount
of inventory at each process. The succeeding process orders and withdraws the parts from
the preceding process only at the rate and at the moment it has consumed all the parts.
The preceding process then only produced on the parts withdrawn by the succeeding
process.”

Figure 13 Circulation of information in a single-stage single-product Kanban-controlled


production line (see online version for colours)

Note: Withdrawal and supplier Kanban circulate as shown by the solid line, production
Kanban circulates as shown by the dotted line, and WIP flows as shown by the
dashed line

9.14 Kanban system


Husseini et al. (2006) consider Kanban as a main tool for production control in a JIT
system. The word ‘Kanban’ when translated into English means signal. It is usually a
card or tag accompanying work-in-process parts. In Kanban system parts, components
are supplied continuously so that worker should get what they need, when they need,
80 G. Singh and I.S. Ahuja

where they need and how much they need. There are two types of Kanbans, which are
used as a tool in the JIT production system. The ‘withdrawal Kanban’ is used to indicate
the type and amount of product which the next process should withdraw from the
preceding process. The ‘production ordering Kanban’ specifies the type and quantity of
product which the current process must produce (Chandra and Kodali, 1998). Kanban is a
pull based system. Parts/components are supplied when there is demand. Number of
parts/components that are manufactured depends on customer’s demand, in other words
number of cards received by manufacturer. In Kanban system, parts/components are not
produced until the manufacturer receives card. Kanban is a control mechanism that links
production activities and transmitted demand information from final product buffers to
the preceding workstation by using Kanban cards (Al-Tahat and Mukattas, 2006).
Figure 13 given by Al-Tahat and Mukattas (2006) explains how circulation of
information takes place in a single-stage single-product Kanban-controlled production
line.

9.15 Total quality management


While, undoubtedly, a principal function of the quality control department is to ensure
that the level of defects of parts leaving the shop floor falls within specified levels, the
more important objective is to be able to detect the defects at source as soon as they arise
(Lee and Seah, 1987). TQM is a manufacturing programme aimed at continuously
improving and sustaining quality products and processes by capitalising on the
involvement of management, workforce, suppliers, and customers, in order to meet or
exceed customer expectations (Venkatesh et al., 2007). TQM, in its simplest form,
encompasses all actions, values and beliefs of an organisation which aim to improve and
maintain quality standards. Maintaining and improving quality is an integral part of JIT
(Chandra and Kodali, 1998).

10 Customers

Buyer-seller linkage is critical to successful execution of this JIT marketing strategy


(Kenneth et al., 2011). Customers want to purchase quality products at fair prices and
have those products delivered in a timely manner (Peters and Austin, 1995) and the
overriding purpose of strengthening relationships with customers is to more effectively
respond to changes in customer demand (Green and Inman, 2006). Claycomb et al.
(1999a) define JIT-with-customers as ‘the use of the integrated, problem-solving
initiatives of a JIT philosophy concentrating on improving quality and facilitating
timeliness in supply and distribution to external customers’.

11 Elements of JIT

After going through literature, many author suggested different elements of JIT some of
these are discussed below.
Ramarapu et al. (1995) has grouped elements of JIT in five broader critical factors:
elimination of waste; production strategy; quality control and quality improvement;
Just-in-time manufacturing 81

management commitment and employee participation; and vendor/supplier participation.


The elements of JIT discussed by various authors are depicted in Table 6.
Table 6 Elements discussed by various authors

Authors Elements
Benson (1986) Total visibility – of equipment, people, material and processes;
synchronisation and balance – of production to sales and supply to
production; respect for people – line operators are responsible for
production, problem solving and improvement; flexibility – adapt production
to customer needs; continuous improvement – never satisfied with the
process; responsibility for the operation’s environment – those who design,
manage and operate the processes are responsible for the outcome; holistic
approach – company-wide philosophy of elimination of waste.
Lee and Seah The number of jobs drawn (completed); the process utilisation; the set/run
(1987) time ratio; the mean and variance of queue time; the mean and variance of job
tardiness; and the work-in-progress level.
Golhar and Elimination of waste, employee involvement, supplier long-range
Stamm (1991) relationships, and total quality control.
Clark and Mia Inventory control
(1993) Inventory level, inventory turnover, space available in factory, space
available in warehouse
Production control
Cycle time, labour productivity, down time, capital productivity or
machine utilisation, number of change over, change over time, reduction
in unit cost, safety
Quality control
Scrap, rework and number of defects, quality costs, reduction in write
offs, appraisal costs
Customer service control
Schedule achievement, order fill rate, stock outs, outstanding orders,
outstanding requisitions, value of product awaiting dispatch.
Clarke and Reduction of raw materials inventory, reduction of work in process inventory,
Mia (1993) reduction of throughput time, reduction of finished goods inventory,
improved product quality, faster customer service, reduction of waste and
rework, improved control of production, product diversification.
Other objectives listed by respondents include:
Improved utilisation of factory space; reduction in storage space,
improved labour productivity, improved scheduling and communications,
reduction of departmental thinking, employee participation and team
building, customer requirement, more accurate inventory, improved cash
flow, survival.
Ramarapu Grouped JIT elements into the five broader critical factors:
et al. (1995) Elimination of waste, production strategy, quality control and quality
improvement, management commitment and employee participation and
vendor/supplier participation.
They further sub classified these elements:
Elimination of waste:
Reduction in waste, reduce lot size, reduce lead-time, automation
82 G. Singh and I.S. Ahuja

Table 6 Elements discussed by various authors (continued)

Authors Elements
Ramarapu Production strategy:
et al. (1995) Reduced setup times, stable production, preventive maintenance, group
technology.
Quality control and improvement:
Continuous quality improvement, halt production line, statistical process
control, quality circles
Management commitment and employee participation (in decision making):
Cross-training/education, team decision making, management
participation and commitment employee suggestions
Vendor/supplier participation:
Quality parts, reliable and prompt deliveries, small lot size,
communication with suppliers long-term contract, supplier training, single
source supplier.
Spencer and Production strategy elements: setup reductions, lot size reductions, preventive
Guide (1995) maintenance, physical layout management, cross-trained workers, effective
capacity utilisation, plant-wide programme adoption of JIT methods, in-house
quality, JIT vendor strategy, lot size reductions, lead time reduction, quality,
sole sourcing, JIT human relations strategy, mutual respect, JIT seen as
overall philosophy of business, JIT education throughout organisation.
Fuller (1995) Small lot sizes delivered in exact quantities, few suppliers, ideally one per
component, supplier selection based on quality and delivery performance,
long-term contracts, standardised packaging, reduced paperwork, delivery
synchronisation to production, geographically close suppliers, improved data
exchange.
Zhu and Setup time reduction, in-house lot size, group technology, cross-training,
Meredith preventive maintenance, vendor lot size, sole sourcing, vendor lead time,
(1995) quality certificates from vendor, pilot project, JIT team, JIT education,
outside consultant, JIT champion, investigate suggestions, authority to stop
lines, quality circles, schedule stability, top management commitment,
relationship with supplier, flatten bill of materials, communication, co-worker
relations, flexibility
Yasin and Exponential smoothing models, regressed models, econometric models,
Wafa (1996) customer provided forecasts, type and extent of process automation and
process, layout modification, CAD, CAM, robotics, use of CIM, Extent of
modifying process layout. Availability of quality assurance methods and
systems, quality circles, statistical quality procedures, total quality
management.
McLachlin Promotion of employee responsibility, provision of training, promotion of
(1997) teamwork, demonstration of visible commitment, provision of workforce
security, and use of group performance measures.
Wafa and The four categories are: management, workers, process, and suppliers.
Yasin (1998)
Just-in-time manufacturing 83

Table 6 Elements discussed by various authors (continued)

Authors Elements
Chandra and Organisation in modules/cells, highly motivated work force (HMW), respect
Kodali (1998) to humanity and creativity, top management support (TMS), continuous
improvement (Kaizen), flexible workforce, focused factory (flow and layout),
group technology, reliable equipment, automation, efficient material handling
system and standard containers, preventive maintenance, smooth build-up rate
(Heijunka), reduced setup time, housekeeping, simplification of product and
process, Kanban system, total quality management, small lot frequent
deliveries, vendor reliability, few committed suppliers, vendor flexibility.
Claycomb JIT purchasing, JIT selling, JIT production, size, natural logarithm of
et al. (1999b) employees, natural logarithm of sales, inbound inventory, in-process
inventory, spans of control, senior marketing executive span, senior
production executive span, senior logistics executive span, senior purchasing
executive span, hierarchical layers, layers for marketing, layers for
production, layers for logistics, layers for purchasing, ROI performance,
profit growth perform.
Canel et al. Total visibility, respect for people, flexibility, continuous improvement,
(2000) holistic approach, total visibility, synchronisation and balance, flexibility,
respect for people.
Cua et al. Setup time reduction, pull system, JIT delivery by suppliers, equipment
(2001) layout, daily schedule adherence
Ahmad et al. Setup time reduction, in-house lot sizes, group technology, cross-training,
(2002) preventive maintenance, uniform flow loading, statistical process control,
focus factory, employee involvement, employee empowerment, Jidoka,
improved performance measurement, work team, vendor lot sizes, suppliers,
vendor lead time reduction, quality certification of suppliers, Kanban,
long-term supplier agreement.
Yasin et al. Reduction of rejects of final goods/services, improvement in relationship with
(2003) suppliers, reduction in the variability of workload levels, reduction of
inventory, improvement in customer service, improvement in on-time receipts
from suppliers, improvement in worker morale, improvement in operational
efficiency, reduction in labour turnover, extent to which the company would
recommend, JIT to others, setup time reduction, improvement in customer
perceptions of product/service quality, lead time reduction, monetary savings
Mistry (2005) Point-of-use with reduced floor space, reduced floor space with capital cost
savings, point-of-use with reduced inventories, reduced inventories with
carrying cost savings, point-of-use with fewer material transactions or better
quality control, fewer material transactions or better, quality control with
increased revenue, assemble to order with reduced floor space, reduced man
hours with labour cost savings, assemble to order with reduced cycle times,
no physical inventories with reduced man hours, supplier programme with
reduced man hours.
84 G. Singh and I.S. Ahuja

Table 6 Elements discussed by various authors (continued)

Authors Elements
Wakchaure Lot size reduction, setup time reduction, buffer stock removal, material
et al. (2006) handling discipline, group technology, product scheduling, under capacity
scheduling, zero deviation form scheduling, component item standardisation,
multifunction workers, worker centred quality control, Poka Yoke, preventive
maintenance, Kanban, JIT purchasing, quality circles, relationship with
supplier, effective communication, top management commitment, sole
sourcing, process flexibility, Kaizen, reliable and prompt deliveries,
automation, long-term contract, supplier training, SPC, house keeping, life
long employment, high quality, layout improvement, product and process
simplification, smooth flow of material, SQC, WIP reduction, zero defect,
support from workers, stock to dock delivery, standard container, firm
schedule to suppler, vendor location, buyer control over freight, respect for
humanity, reliable equipment, smooth built up rate, TQM, focused factories.
Kumar and Automation, administrative efficiency, bar code technology, buffer stock
Grewal (2007) removal, continuous improvement, customer care, customer satisfaction,
communication and information sharing, design for service, employee
involvement, flow layout, flexible workforce, group technology, house
keeping, inventory reduction, JIT purchasing, JIDOKA, Kanban card or
system, lot size reduction, lead time reduction, Poka yoke, preventive
maintenance, product simplification, process simplification, process
flexibility, process improvement, quality circles, quality functions
deployment, standard containers, small lot size, setup time reduction,
smooth flow of materials, standardisation, statistical process control, total
productive maintenance, team work, work-in-process reduction, waste
reduction, zero defect, zero deviation schedule.
Alawode and Enlightenment and education, quality control, redesigning and restructuring
Ojo (2010) of working environment, flow manufacturing, improvement of customer
relation, improvement of productivity, reduced idle inventory levels.
Wilson (2009) Direct communication, market-based pricing and bidding mechanisms,
coordination by plan, notification, sequencing, tracking, inventory
management, standardisation scheduling, synchronisation
Kumar (2010) Buffer stock removal, continual quality improvement, effective
communication, employees empowerment, poke-yoke, frequent and reliable
deliveries, group incentive scheme, high QC visibility, job enlargement,
Kanban system, line stop strategy, long-term employment, long-term QC
commitment, multifunctional worker, TPM, QC authority to worker, QC
authority to supplier, quality certification to suppliers, quality circles, regular
quality auditing, self-correction of defects, setup time reduction, short lead
time, small lot size, standard containers, standardisation, process control,
statistical quality control, strong buyer-supplier relationship, team work, total
quality control, U-cells, vendor rating, scheduling flexibility, zero defect, zero
deviation from schedule, 100% quality inspection.
Just-in-time manufacturing 85

Table 6 Elements discussed by various authors (continued)

Authors Elements
Singh and Master schedule, automation and autonomation, buffer stock removal, cellular
Garg (2011a) manufacturing, computer-integrated manufacturing, continuous improvement,
effective communication, focused factories, flexible workforce, JIT
purchasing, high quality, Jidoka, Kanban system, layout improvement,
process flexibility, product and process simplification, pull-controlled flow,
quality circles, robots, setup time reduction, small lot size, standard
containers, standardisation, statistical process control, statistical quality
control, streamlined process design, total productive maintenance, total
quality control, under capacity scheduling, worker-centred quality control,
work-in-process reduction, zero defect, zero deviation schedule, multi
functional workers.
Singh and Establishing lot size, vendor selection, vendor evaluation, inspection of
Garg (2011b) incoming materials, negotiating with vendors, determining mode of
transportation, setting specifications, paper work, packaging

Figure 14 Broad classification of JIT elements

After going through the literature it is found that JIT elements can be broadly classified
as shown in Figure 15.
JIT elements have direct impact on the performance of any organisation. Ahmad et al.
(2004) depicted the relationship between JIT elements, operating performance and
financial growth of an organisation. Figure 16 gives the path diagram between JIT
elements, operating performance and financial growth.
86 G. Singh and I.S. Ahuja

Figure 15 Critical elements of JIT (see online version for colours)

Figure 16 Path diagram between JIT elements, operating performance and financial growth

12 Success factors for strategic JIT implementation

In a JIT environment, any system for measuring performance must be designed to reflect
the new production philosophy. Such a system should be capable of measuring and
reporting progress toward total quality control, reducing inventory levels, faster setup
times, reduced lead time, and new product launch times. Equally important would be
measures indicating improvement in on-time deliveries, floor space utilisation, and
quality yield. Such a system may require the elimination of some traditional short-term
financial measures and include some new, more relevant non-financial measures of
performance (Green et al., 1991).
Mistry (2005) discussed implementation of JIT in supply chain and from Figure 17, it
is clear that what strategies are to be employed in improving processes and out come of
these improvements are also shown in the figure.
Just-in-time manufacturing 87

Figure 17 Mistry’s Data-supported model of JIT-driven profitability

The success factors that are required for the implementation of JIT are broadly classified
as: relationship with vendor/supplier, location of organisation, plant layout, culture of
organisation, production techniques, and communication with dealers. Mackelprang and
Nair (2010) in his study found that JIT is having direct relationship with the performance
measures. Ahmad et al. (2002) discussed the performance measures related to each
element of JIT and these performance measures are listed in Table 7.
Table 7 Ahmad’s performance measures and their categories

Category Performance measure


Quality Conformance to specifications, cost of quality, vendor quality, sales
forecast accuracy, record accuracy, number of suppliers, yields
Time Manufacturing lead times, vendor lead times, changeover/setup
times, meeting project milestones.
Flexibility Number of engineering changes, number of materials part numbers,
new product introduction, new model introduction, new
process/equipment introduction
Delivery/customer Meeting production schedules, on-time delivery, customer surveys
service
Social/environmental Education/training budgets, safety, minimising environmental waste,
environmental monitoring
Cost/financial and Inventory turnover, cost-reduction: dollar savings, dollars of capital
traditional investment, process R&D costs, product R&D costs, dollar
shipments per period, unit material costs, unit labour costs, unit
overhead costs, margins (contribution/gross), return on investment,
capacity utilisation, department budget control
88 G. Singh and I.S. Ahuja

13 Benefits/contributions of JIT

JIT implementation has got many benefits. Claycomb et al. (1999b) in his research work
found that inventory reduction is one of the most commonly cited theoretical advantages
of JIT. But most important benefit listed is reduction in waste, and it may be waste of raw
material, waste during production or process, and waste of finished goods. Some of the
benefits listed by various authors are shown below.
Elimination of waste in production and material (Tesfay, 1990; Hobbs, 1997),
elimination of some material handlers resulting in labour cost savings as a result of JIT
(Yasin et al., 2004a), improving communication internally, i.e., within the organisation
and externally, i.e., between the organisation and its customers and vendors. In Inman
and Mehra (1991), reduction in cost of purchasing raw material or reduction in setup
(ordering) which is a major cost to most organisations (Ansari and Modarress, 1990;
Gargeya and Thompson, 1994; Yasin et al., 2004a), improvement in the quality level of
incoming material, less paperwork (Yasin et al., 2004a), reducing inventories (raw
material, Work-in-process, Finished goods ), reducing lead-time, reducing throughput
time, improvement in the quality of products, increasing productivity and enhancing
customer responsiveness, shortened customers response time and relation with vendors
(Schonberger, 1982a; Hernandez, 1989; Ramsay et al., 1990; Arogyaswamy and
Simmons, 1991; Crawford and Cox, 1991; Clark and Mia, 1993; Norris et al., 1994;
White, 1993; Mazany, 1995; Hobbs, 1997; Chase et al., 1998; Yasin et al., 2004a), raise
organisational discipline and managerial participation (Francis, 1989), reduction in the
number of grievances of filed by workers (Yasin et al., 2004a), increased employee
involvement (Hernandez, 1989; Chase et al., 1998), integration of the different functional
areas in the organisation. It especially bridges the gap between production and accounting
or enhance in productivity (Johansson, 1988; O’Grady, 1988; Clark and Mia, 1993),
reduced downtime of machinery, reduced failures (Mazany, 1995), decreasing
manufacturing costs without compromising cost (Hernandez, 1989; Chase et al., 1998),
improving quality that consistently and continually meets customers requirements,
minimising levels of inventory and improving relationship with suppliers (Aghazadeh,
2003), simplification of processes, improved quality, and increased flexibility (Mazany,
1995), reducing the labour turnover rate, reducing manufacturing lead times, reducing
setup time (Wafa and Yasin, 1998; Yasin et al., 2004a), reducing use of space, lower
costs, better quality and higher competitive advantage (Hernandez, 1989; Inman and
Mehra, 1993; Chase et al., 1998), significant reduction in rejects of outgoing final
products/services/enhanced flexibility and ability to meet customer demands (Hernandez,
1989; Chase et al., 1998; Yasin et al., 2004a), where as Schonberger and Ansari (1984)
included the following benefits of implementing JIT: low part costs – low scrap costs;
low inventory carrying costs; quality – fast detection and correction of unsatisfactory
quality, and ultimately higher quality purchased parts; design – fast response to
engineering change requirements; administrative efficiency – fewer suppliers, minimal
expediting and order, release work; simplified communications and receiving activities;
productivity – reduced rework, reduced inspection; reduced parts-related delays; capital
requirements – reduced rework inventories of purchased parts, raw materials, WIP and
finished goods.
By using JIT practice firms can also save money as funds that are used to procure
inventories can be used elsewhere. Implementation of JIT can help in saving of storage
space in the industry, as areas used to store inventories can be used for other more
Just-in-time manufacturing 89

productive uses; throughput time is reduced, resulting in greater potential output and
quicker response to customers; defect rates are reduced, resulting in less waste and
greater customer satisfaction; work in process inventories can be reduced or eliminated.
In manufacturing, JIT has been credited with many holistic benefits. These benefits
include reduced inventory levels; reduced investment in inventory; improved quality of
incoming materials; and consistent high-quality products. Some additional benefits of JIT
that have been achieved in manufacturing firms are: improved operational efficiency,
uniform workstation loads; standardised components; standardised work methods;
cooperative relationships with suppliers; closer collaboration with customers, and
improved customer satisfaction (Yasin et al., 2004b).
Chungi and Bakar (2001) depicted beneficial effects of JIT purchasing practice on
quality of product and these benefits are listed in Table 8.
Table 8 Chung and Bakar’s effect of JIT purchasing practices on quality

Purchasing activities JIT practice Effect on quality


Lot size Purchase in small lot-sizes with Fast detection and correction of
frequent deliveries defects
Supplier evaluation Suppliers evaluated on ability to Suppliers put more emphasis on
provide high quality products their product quality
Supplier selection Single source in close Frequent on-site visits by technical
geographical area people; rapid and better
understanding of quality
requirements
Product specification Fully specify only essential Suppliers have more discretion in
product characteristics product design and manufacturing
methods, which results in
specifications that are more likely
to be attainable
Bidding Stay with the same suppliers; do Suppliers can afford cost of
informal value analysis to reduce long-term commitment to meet
bid price; no annual rebidding. quality requirements, and they
become more aware of buyer’s true
requirement
Receiving inspection Vendor certifies quality; Quality at source (the supplier) is
receiving inspections are reduced more effective and less costly
and eventually eliminated
Paperwork Less formal system; reduced More time available for purchasing
volume of paperwork people to devote to quality matters.

14 Stumbling blocks of JIT manufacturing

Although JIT is having many advantages but there seems to be certain reservations or
limitation also. The manufacturer’s ability to meet the consumer’s demand well in time
has been affected by several sources of uncertainty, in this highly competitive and
demand driven production with JIT inputs. Due to this, manufacturer may suffer loss of
revenue and customers. This has great impact on the financial and on the viability of the
manufacturer. So before implementing JIT manufacture has to determine whether they
can meet demands of customers in given time frame or not (Hussain et al., 2011). JIT
90 G. Singh and I.S. Ahuja

requires several modifications in support activities (accounting system, personnel


evaluation, worker and management incentive systems, etc.), both within and outside the
firm, which, in some cases, require plentiful investments. Use of JIT production systems
can be problematic. Most companies introduce JIT into an existing plant trying to have
the minimal interference on production and achieving a smooth changeover requires
careful planning and prioritisation of the JIT techniques to be implemented (Moreira and
Alves, 2006).
According to Zipkin (1991), the highest risk in reducing inventories too fast is that
the suppliers and the workers came under pressure because, if delays occur, all the system
is in danger. What hampers successful JIT implementation is the lack of clarity and
priority leading to confusion and wasteful expenditure of organisational energy
(Mahadevan, 1997).
Yasin (2004b), in his work gave factors contributing to failure of JIT and these
includes, lack of cooperation from vendors in a form of inconsistent timing and quantities
of deliveries, the lack of resources to invest in direct linkages with vendors, the
unwillingness of workers to perform multi-tasks, management’s resistance to sharing
operational power with employees, the lack of management confidence in hourly
workers’ commitment to the organisation, and the lack of accurate forecasting system.
Clark and Mia (1993) studied about JIT implementing and non-JIT implementing
firms in Australia and listed the following reasons for not implementing JIT, the risk of
late delivery is too high; constraint is capacity; products are unique and built to customer
specification; its practicality is questioned by some managers; TQM, materials resources
planning, or quick-response manufacturing are the main thrust of our systems
development efforts; management information system is inadequate to support JIT;
customers or suppliers are inflexible; inventories are small; raw materials are always
available on a JIT basis; raw materials are available on a seasonal basis (food industry);
raw materials are imported and supplier lead times are unpredictable.

Figure 18 Problems of JIT implementation (see online version for colours)

Matson and Matson (2007) identified 20 potential troublesome issues by survey of JIT
companies and these issues are listed as: lack of supplier support, supplier inability to
deliver materials on time, substantial distance between suppliers and customers, poor
Just-in-time manufacturing 91

production quality, poor quality of supplied parts, difficulty establishing systems to


support JIT, poor and/or inaccurate data, difficulty establishing accounting practices to
support JIT, training difficulties, lack of JIT information, lack of top management
support, lack of employee support, union difficulties, difficulty achieving setup time
reduction, difficulty laying out the facility to support JIT, difficulty implementing smaller
lot sizes, unstable customer schedules/scheduling, difficulty with large number of items
produced and/or amount of material handled, forecasting inaccuracies, difficulty
justifying JIT. Salaheldin (2005) suggested that there are three groups of obstacles that
hinder the implementation of JIT in Mexican operations: employee participation
obstacles, supplier participation obstacles, obstacles to the managerial integration of the
JIT companies.
It is concluded that for implementation of JIT problems are broadly classified into
supplier’s, worker’s, management’s, production, and customer’s. Figure 18 gives the
problem faced by any JIT implementing company.

14 Conclusions

The contributions of JIT implementation initiatives for accruing strategic benefits for
meeting the challenges posed by global competition are highlighted in the literature. Of
all the strategies employed by an organisation, JIT has emerged as the front runner to
compete in the global business arena. An effective JIT implementation programme can
focus on addressing the organisation’s problems, with a view to optimise purchasing,
production, utilisation of workers and delivery of finished goods. JIT has become a new
management practice in all types of organisations. In recent years, many organisations
have showed significant improvements in business through JIT implementation. JIT
strategies and philosophy can be effectively employed to realise fundamental
improvements of manufacturing performance in the organisation, thereby leading the
organisation to compete with others successfully in this highly competitive environment.
JIT can prove to be an effective global strategy by which firms can enhance their
performance and achieve competencies. Thus, in this highly competitive scenario, by
using JIT the organisations could scale new levels of achievements. The implementation
of JIT really makes the difference between success and failure of the organisations. This
paper reveals the relevance of strategic JIT initiatives in the manufacturing/service sector
and the strategies adopted by organisation for implementation of JIT to realise its
objectives successfully. From the study, it is evident that the successful JIT
implementation programme can enable an organisation to gain an edge over the others for
achieving enhanced manufacturing performance and delivering the products of good
quality and competitive rates.

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