JIT Production Method Reduces Inventory Costs

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CHAPTER I
INTRODUCTION
Just-in-time (JIT) is a production strategy that strives to improve a business' return on
investment by reducing in-process inventory and associated carrying costs. Just In Time
production method is also called the Toyota Production System. To meet JIT objectives, the
process relies on signals or Kanban between different points in the process, which tell
production when to make the next part. Kanban are usually 'tickets' but can be simple visual
signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT
focuses on continuous improvement and can improve a manufacturing organization's return
on investment, quality, and efficiency. To achieve continuous improvement key areas of
focus could be flow, employee involvement and quality.
Quick notice that stock depletion requires personnel to order new stock is critical to
the inventory reduction at the center of JIT. This saves warehouse space and costs. However,
the complete mechanism for making this work is often misunderstood.
For instance, its effective application cannot be independent of other key components
of a lean manufacturing system or it can "...end up with the opposite of the desired result." In
recent years manufacturers have continued to try to hone forecasting methods (such as
applying a trailing 13 week average as a better predictor for JIT planning, however some
research demonstrates that basing JIT on the presumption of stability is inherently flawed.
So too in a manufacturing operation component parts could conceptually arrive just-in-time
to be picked up by a worker and used. So we would at a stroke eliminate any inventory of
parts, they would simply arrive just-in-time! Similarly we could produce finished goods just-
in-time to be handed to a customer who wants them. So, at a conceptual extreme, JIT has no
need for inventory or stock, either of raw materials or work in progress or finished goods.
DEPARTMENT OF MECHANICAL ENGINEERING. Page 1

MARATHA MANDAL’S ENGINEERING COLLEGE, BELGAUM.
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1.1 History
JIT originated in Japan. Its introduction as a recognized technique/philosophy/way

of working is generally associated with the Toyota motor company, JIT being initially
known as the "Toyota Production System". Note the emphasis here - JIT is very much a
mindset/way of looking at a production system that is distinctly different from what
(traditionally) had been done previous to its conception.
Within Toyota Taiichi Ohno is most commonly credited as the father/originator of

this way of working. The beginnings of this production system are rooted in the historical
situation that Toyota faced. After the Second World War the president of Toyota said "Catch
up with America in three years, otherwise the automobile industry of Japan will not survive".
At that time one American car worker produced approximately nine times as much as a
Japanese car worker. Tahiti Ohno examined the American industry and found that American
manufacturers made great use of economic order quantities - the traditional idea that it is best
to make a "lot" or "batch" of an item (such as a particular model of car or a particular
component) before switching to a new item. They also made use of economic order quantities
in terms of ordering and stocking the many parts needed to assemble a car.
Ohno felt that such methods would not work in Japan - total domestic demand was
low and the domestic marketplace demanded production of small quantities of many different
models. Accordingly Ohno devised a new system of production based on the elimination of
waste. In his system waste was eliminated by:
 Just-in-time - items only move through the production system as and when they are
needed
 Autonomation - (spelt correctly in case you have never met the word before) -
automating the production system so as to include inspection - human attention only
being needed when a defect is automatically detected whereupon the system will stop
and not proceed until the problem has been solved.

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In this system inventory (stock) is regarded as an unnecessary waste as too is having

to deal with defects.
Ohno regarded waste as a general term including time and resources as well as
materials. He identified a number of sources of waste that he felt should be eliminated:
 overproduction - waste from producing more than is needed

 time spent waiting - waste such as that associated with a worker being idle whilst
waiting for another worker to pass him an item he needs (e.g. such as may occur in a
sequential line production process)
 transportation/movement - waste such as that associated with transporting/moving
items around a factory
 processing time - waste such as that associated with spending more time than is
necessary processing an item on a machine
 inventory - waste associated with keeping stocks
 defects - waste associated with defective items
At the time car prices in the USA were typically set using selling price = cost plus
profit mark-up. However in Japan low demand meant that manufacturers faced price
resistance, so if the selling price is fixed how can one increase the profit mark-up? Obviously
by reducing costs and hence a large focus of the system that Toyota implemented was to do
with cost reduction.
Whilst we may think today that Japan has harmonious industrial relations with
management and workers working together for the common good the fact is that, in the past,
this has not been true. In the immediate post Second World War period, for example, Japan
had one of the worse strike records in the world. Toyota had a strike in 1950 for example. In
1953 the car maker Nissan suffered a four month strike - involving a lockout and barbed wire
barricades to prevent workers returning to work. That dispute ended with the formation of a
company backed union, formed initially by members of the Nissan accounting department.
Striking workers who joined this new union received payment for the time spent on strike, a
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powerful financial inventive to leave their old union during such a long dispute. The slogan
of this new union was "Those who truly love their union love their company".
In order to help the workforce to adapt to what was a very different production
environment Ohno introduced the analogy of teamwork in a baton relay race. As you are
probably aware typically in such races four runners pass a baton between themselves and the
winning team is the one that crosses the finishing line first carrying the baton and having
made valid baton exchanges between runners. Within the newly rearranged factory floor
workers were encouraged to think of themselves as members of a team - passing the baton
(processed items) between themselves with the goal of reaching the finishing line
appropriately. If one worker flagged (e.g. had an off day) then the other workers could help
him, perhaps setting up a machine for him so that the team output was unaffected.
Ohno has written that Toyota was only able to institute kanbans on a company wide
basis in 1962, ten years after they first embarked on the introduction of their new production
system. Although, obviously, as the originators of the approach Toyota had much to learn and
no doubt made mistakes, this illustrates the time that can be required to successfully
implement a JIT system in a large company. Moreover you can reflect on the management
time/effort/cost that was consumed in the development and implementation of their JIT
system.
With respect to the Western world JIT only really began to impact on manufacturing
in the late 1970's and early 1980's. Even then it went under a variety of names - e.g. Hewlett
Packard called it "stockless production". Such adaptation by Western industry was based on
informal analysis of the systems being used in Japanese companies. Books by Japanese
authors (such as Ohno himself) detailing the development of JIT in Japan were not published
in the West until the late 1980's.
As an indication of the growth of interest in JIT over time the graph below shows
the number of documents (such as books and conference proceedings) referring to just-in-
time in the British Library, which has a very extensive collection of such documents relating
to the UK. The earliest material I could find was from 1984, when there was one book
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published and one set of conference proceedings. The graph shows the number of documents
published each year as well as the cumulative number published.
1.2 Growth of publication about JIT
Figure 1: Growth of publication about JIT
One often reads nowadays that JIT involves employee participation, involving
workers so as to gain from their knowledge and experience. Such participation is meant to
ensure that workers feel involved with the system and make suggestions for improvements,
cooperate in changes, etc. Personally I am not convinced that this aspect of JIT, as it is

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interpreted nowadays, played any part in its initial development. Certainly Ohno, writing in
1978 long before the appearance in the West of material related to JIT, in 8 pages of single
spaced A4 paper outlining the Toyota Production System makes little mention of this aspect.
My best guess, from my reading of the subject, is that JIT started out as a top-down, centrally
organised and imposed production system. Whilst it may later have come to take on a
"human-face" with connotations of worker involvement and participation I personally doubt
it started out that way.

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CHAPTER- II
JIT PHILOSOPHY
Philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden
causes of inventory keeping, and are therefore not a simple solution for a company to adopt.
The company must follow an array of new methods to manage the consequences of the
change. The ideas in this way of working come from many different disciplines including
statistics, industrial engineering, production management, and behavioral science. The JIT
inventory philosophy defines how inventory is viewed and how it relates to management.
Inventory is seen as incurring costs, or waste, instead of adding and storing value,
contrary to traditional accounting. This does not mean to say JIT is implemented without
awareness that removing inventory exposes pre-existing manufacturing issues. This way of
working encourages businesses to eliminate inventory that does not compensate for
manufacturing process issues, and to constantly improve those processes to require less
inventory. Secondly, allowing any stock habituates management to stock keeping.
Management may be tempted to keep stock to hide production problems. These problems
include backups at work centers, machine reliability, process variability, lack of flexibility of
employees and equipment, and inadequate capacity.
In short, the just-in-time inventory system focus is having “the right material, at the right
time, at the right place, and in the exact amount”-Ryan Grabosky, without the safety net of
inventory. The JIT system has broad implications for implementers.
 elimination of waste in its many forms

 belief that ordering/holding costs can be reduced
 continuous improvement, always striving to improve

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2.1 Transaction cost approach
JIT reduces inventory in a firm. However, a firm may simply be outsourcing their
input inventory to suppliers, even if those suppliers don't use Just in time (Naj 1993).
Newman (1994) investigated this effect and found that suppliers in Japan charged JIT
customers, on average, a 5% price premium.
2.2 Environmental concerns
During the birth of JIT, multiple daily deliveries were often made by bicycle.
Increased scale has required a move to vans and lorries (trucks). Cusumano (1994)
highlighted the potential and actual problems this causes with regard to gridlock and burning
of fossil fuels. This violates three JIT waste guidelines:
1. Time—wasted in traffic jams

2. Inventory—specifically pipeline (in transport) inventory
3. Scrap—fuel burned while not physically moving
2.3 Price volatility
JIT implicitly assumes a level of input price stability that obviates the need to buy
parts in advance of price rises. Where input prices are expected to rise, storing inventory may
be desirable.
2.4 Quality volatility
JIT implicitly assumes that input parts quality remains constant over time. If not,
firms may hoard high quality inputs. As with price volatility, a solution is to work with
selected suppliers to help them improve their processes to reduce variation and costs. Longer
term price agreements can then be negotiated and agreed-upon quality standards made the
responsibility of the supplier. Fixing up of standards for volatility of quality according to the
quality circle

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2.5 Demand stability
Karmarker (1989) highlights the importance of relatively stable demand, which helps
ensure efficient capital utilization rates. Karmarker argues that without significantly stable
demand, JIT becomes untenable in high capital cost production.
2.6 Supply Stability
In the U.S., the 1992 railway strikes caused General Motors to idle a 75,000-worker
plant because they had no supply.

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CHAPTER III
RECONCILING JIT AND EOQ
It is a common misconception that JIT, a Japanese originated concept, is somehow

radically different from the classical Western concept of the Economic Order Quantity
(EOQ), based as it is on the most economic level of stock. I hope below to convince you that
this is not so.
Recall from the notes about inventory theory the problem of deciding the appropriate
amount of stock to order.
Assume
 Stock used up at a constant rate (R units per year)

 Fixed setup cost co for each order - often called the order cost
 No lead time between order and arrival of order
 Variable holding cost ch per unit per year
Then we need to decide Q, the amount to order each time, often called the batch (or
lot) size.

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CHAPTER IV
JIT OUTLINE POINTS
 Originated in Japan
 Often said Japanese industry works - just-in-time, Western industry works - just-in-
case
 JIT is also known as stockless production or lean production
 JIT is a suitable production system when:
 have steady production of clearly defined standard products

 a reasonable number of units made
 a high value product
 have flexible working practices and a disciplined workforce
 short setup times on machines
 quality can be assured, e.g. zero defects either though good working practices or
though a cost penalty
Kanban
 a signal or message or communication, e.g. wave hands, shout, send a card, electronic
 used to control the flow of items though the production process
It is often said that:
 Materials Requirements Planning (MRP) = a 'Push' system

 JIT = a 'Pull' system
I believe that this is an incorrect analysis - MRP is a system based on fulfilling

predicted usage in a set time period. JIT is a system based on actual usage - parts of the
production system are "linked" together via kanbans as the system runs. It is this linkage that
is the distinguishing difference between MRP and JIT - JIT is a dynamic linked system, MRP
is not.

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CHAPTER –V
ELEMENTS OF JIT
 JIT manufacturing (production) focuses on production system to achieve value-added

manufacturing
 TQM is an integrated effort designed to improve quality performance at every level &
Minimizing waste
 Respect for people rests on the philosophy that human resources are an essential part of JIT
philosophy. JIT considers people to be the organization’s most important resource

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Figure 4 : Elements of JIT
 regular meetings of the workforce (e.g. daily/weekly)

 discuss work practices, confront and solve problems
 an emphasis on consultation and cooperation (i.e. involving the workforce) rather than
confrontation
 modify machinery, e.g. to reduce setup time
 reduce buffer stock
 expose problems, rather than have them covered up
 reveal bad practices
 take away the "security blanket" of stock
JIT need not be applied to all stages of the process. For example we could keep large
stocks of raw material but operate our production process internally in a JIT fashion (hence
eliminating work-in-progress stocks).

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CHAPTER –VI
REQUIREMENTS OF JIT TO ACHIEVE EFFICIENCY
 JIT considers people to be the organization’s most important resource

 JIT views waste as anything that does not add value.
 JIT requires fast and regular supply
 Defective-free, high quality products and processes avoids costs.
 Production flexibility at every stage of supply
 Stability and disciplines of schedules
 JIT in a manufacturing environment needs proper communication with
customers
 Complete support & cooperation of suppliers

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CHAPTER –VII
CLASSIC JIT DIAGRAM
The classic JIT diagram is as below. There the company (the boat) floats on a sea of
inventory, lurking beneath the sea are the rocks, the problems that are hidden by the sea of
inventory.
JIT is an approach designed to minimize inventory cost and increase product

quality and plant productivity
 Inventory = Lead Time (less is better)
 Inventory hides problems
Inventory reduction exposes problems
Figure 5 : Classic JIT diagram.

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|
--|--
|
---------------
\ /
========\ Company /============ Sea of inventory
\---------/
x
xxx xxxx
xxxxx xxxxxx Rocks - the problems hidden
xxxxxxxxxxxxxxxx by the sea of inventory
If we reduce the inventory level then the rocks become exposed, as below.
|
--|--
|
--------------- x
\ / xxx xxxx
========\ Company /====xxxxx===xxxxxx========
\---------/ xxxxxxxxxxxxxxxx
Now the company can see the rocks (problems) and hopefully solve them before it
runs aground!
One plan to expose the problems is simply to:
 make a large amount of finished goods stock to keep the customers supplied
 try running the production system with less inventory to expose problems

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 revert to the original levels of inventory until you have had time to fix the problems
you exposed
repeat the above - hence continuous improvement

CHAPTER –VIII
SUPPLIERS
Suppliers can be crucial to JIT success
Supplier gets:
 long-term, guaranteed, contract

 a good price
 steady demand
 minimal paperwork (e.g. use electronic means to order - such as email or Web or
electronic data interchange, EDI)
In return the supplier agrees to
 quality components (e.g. zero defects)

 guaranteed delivery times
 a "partnership" with its customer
 contingency plans to cope with disruptions, common disruptions might be:
o the effect of bad weather
o a truck drivers strike blocking roads/ports
o a flu outbreak reducing the supplier's workforce
8.1 Supplier selection criteria:
 close to production plant (else potential transportation delays)

 good industrial relations ("involvement", "value", "dignity", "ownership"), no strike
deals

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 you believe that the supplier can met their promises with respect to the list of factors
given above that that they are agreeing to
With suppliers satisfying these criteria you can reduce the total number of suppliers,
indeed it seems logical so to do. If you had five suppliers meeting all these criteria why do
you need five? Obviously you might decide to have more than one supplier for safety
reasons. Even the best run supplier can suffer a factory fire or an earthquake, but probably no
more than two or three suppliers.
As an illustration of this in 1997 Toyota was affected by a fire at a supplier of brake

parts that cost the company an estimated $195 million and 70,000 units of production. The
fire was at a plant that was the sole supplier of brake parts for all but two Toyota models and
forced the company to shut its 18 assembly plants in Japan for a number of days. As a result
Toyota embarked on a review of components that were sourced from a single supplier.
Having a single supplier may be attractive in cost terms, but one does need to balance the risk
(albeit a low probability risk - perhaps a fire every 100-250 years say) against the cost
savings.

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CHAPTER IX
JIT IMPLEMENTATION DESIGN

Step 1: Awareness
• The goal of JIT is to eliminate waste in all its forms.

• The goal is no longer to minimize disruptions
• The assumption of JIT is that we cannot sell everything we make. Thus, we must
produce salable goods (low cost, high quality, etc...) quickly.
• Operation = Motion (Waste) + Work (Added Value)
• Motion alone is a waste that adds cost (counting things, moving boxes, transporting
goods, preparation time, waiting, producing defects, over production, handling
materials, switching things on)
• Inventory decouples individual operations and thereby creates waste (non-value-
added motion) to buffer the operations against the effect of a different form of waste
(long setups, poor material handling procedures, production of defects, etc.)
• For real improvement, we must ask "why" when we encounter any form of waste.
Step 2: Workplace Improvement (the 5 S’s)
• Seiri: Proper arrangement (sort through and sort out, identify what you need, discard
what you do not need )
• Seiton: Orderliness (assign a separate location for all essential items)
• Seiso: Cleanliness (keep the workplace spotless at all times)
• Seiketsu: Cleanup (maintain equipment and tools)
• Shitsuke: Discipline (stick to the rules scrupulously)
Step 3: Flow manufacturing (one piece at a time)
• Place the machines in process sequence

• Design a cellular (U-shaped) layout
• Make one piece at a time in the cell
• Crosstrain workers to handle multiple processes
• Produce according to the cycle time
• Have the operators work standing up and walking
• Use slower, dedicated machines that are smaller and less expensive

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Step 4: Level Production (make the same quantity every day)
• Calculate cycle time based on daily volumes

• Detail the order and number of items being made on the line
• Shorten changeover times between the items
• Create a smooth flow
• Deliver information and parts to the line several times a day
• Production Sequence:
Step 5: Improve and standardize (produce quality safely and inexpensively)
• Efficient arrangements of people, products and machines

• Standardize cycle time
• Standardize work sequence (standard operations bulletins, standard route sheets, work
method manuals)
• Standardize stock-on-hand (Kanban)
Based on a diagram modeled after the one used by Hewlett-Packard’s Boise plant to
accomplish its JIT program.
9.1 Effects
A surprising effect was that factory response time fell to about a day. This improved
customer satisfaction by providing vehicles within a day or two of the minimum economic
shipping delay.
Also, the factory began building many vehicles to order, eliminating the risk they
would not be sold. This improved the company's return on equity.
Since assemblers no longer had a choice of which part to use, every part had to fit
perfectly. This caused a quality assurance crisis, which led to a dramatic improvement in
product quality. Eventually, Toyota redesigned every part of its vehicles to widen tolerances,
while simultaneously implementing careful statistical controls for quality control. Toyota had
to test and train parts suppliers to assure quality and delivery. In some cases, the company
eliminated multiple suppliers.

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When a process or parts quality problem surfaced on the production line, the entire
production line had to be slowed or even stopped. No inventory meant a line could not
operate from in-process inventory while a production problem was fixed. Many people in
Toyota predicted that the initiative would be abandoned for this reason. In the first week, line
stops occurred almost hourly. But by the end of the first month, the rate had fallen to a few
line stops per day. After six months, line stops had so little economic effect that Toyota
installed an overhead pull-line, similar to a bus bell-pull, that let any worker on the line order
a line stop for a process or quality problem. Even with this, line stops fell to a few per week.
The result was a factory that has been studied worldwide. It has been widely
emulated, but not always with the expected results, as many firms fail to adopt the full
system.
The just-in-time philosophy was also applied to other segments of the supply chain in
several types of industries. In the commercial sector, it meant eliminating one or all of the
warehouses in the link between a factory and a retail establishment. Examples in sales,
marketing, and customer service involve applying information systems and mobile hardware
to deliver customer information as needed, and reducing waste by video conferencing to cut
travel time.
9.2 Benefits
Main benefits of JIT include:
 Reduced setup time. Cutting setup time allows the company to reduce or eliminate
inventory for "changeover" time. The tool used here is SMED (single-minute
exchange of dies).
 The flow of goods from warehouse to shelves improves. Small or individual piece lot
sizes reduce lot delay inventories, which simplifies inventory flow and its
management.

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 Employees with multiple skills are used more efficiently . Having employees trained to
work on different parts of the process allows companies to move workers where they
are needed.
 Production scheduling and work hour consistency synchronized with demand . If there
is no demand for a product at the time, it is not made. This saves the company money,
either by not having to pay workers overtime or by having them focus on other work
or participate in training.
 Increased emphasis on supplier relationships. A company without inventory does not
want a supply system problem that creates a part shortage. This makes supplier
relationships extremely important.
 Supplies come in at regular intervals throughout the production day . Supply is
synchronized with production demand and the optimal amount of inventory is on hand
at any time. When parts move directly from the truck to the point of assembly, the
need for storage facilities is reduced.
 better quality products
 quality the responsibility of every worker, not just quality control inspectors
 reduced scrap and rework
 reduced cycle times
 smoother production flow
 less inventory, of raw materials, work-in-progress and finished goods
 cost savings
 higher productivity
 higher worker participation
 more skilled workforce, able and wiling to switch roles
 reduced space requirements
 improved relationships with suppliers
However you should be absolutely clear that implementing a JIT system is a task that
cannot be undertaken lightly. It will be expensive in terms of management time and effort,
both in terms of the initial implementation and in terms of the continuing effort required to
run the system over time.

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CHAPTER X
BUSINESS MODELS FOLLOWING SIMILAR APPROACH
10.1 Vendor-managed inventory
Vendor-managed inventory (VMI) employs the same principles as those of JIT

inventory, however, the responsibilities of managing inventory is placed with the vendor in a
vendor/customer relationship. Whether it’s a manufacturer managing inventory for a
distributor, or a distributor managing inventory for their customers, the management role
goes to the vendor.
An advantage of this business model is that the vendor may have industry experience
and expertise that lets them better anticipates demand and inventory needs. The inventory
planning and controlling is facilitated by applications that allow vendors access to their
customer's inventory data.
Another advantage to the customer is that inventory cost usually remains on the
vendor's books until used by the customer, even if parts or materials are on the customer's
site.
10.2 Customer-managed inventory
With customer-managed inventory (CMI), the customer, as opposed to the vendor in a

VMI model, has responsibility for all inventory decisions. This is similar to JIT inventory

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concepts. With a clear picture of their inventory and that of their supplier’s, the customer can
anticipate fluctuations in demand and make inventory replenishment decisions accordingly.
CHAPTER XI
COMPARATIVE ANALYSIS OF JIT & TRADITIONAL

PURCHASING
 Jumbled flows, long cycles, difficult to schedule
 Product focused cells, flexible equipment, high visibility, easy to

schedule, short cycles

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JIT PURCHASING TRADITIONAL PURCHASING
 Product focused cells, flexible  Jumbled flows, long cycles,

equipment, high visibility, easy to difficult to schedule
schedule, short cycles
 Purchase small lots with frequent  Purchase are made in large
deliveries batches & less frequent deliveries
 Product quality & delivery  Product quality & delivery
performance,& price are fixed performance,& price are not fixed
 No rejects from supplier is  About 2% of rejects from supplier
acceptable is acceptable
 Primary objective is to achieve  Primary objective is to achieve the
product quality lowest possible price
 Delivery schedule is left up to  Delivery schedule is left up to
buyer supplier
 Buyer is responsible for receiving,
 Counting & inspecting of incoming Counting & inspecting all
parts is reduced incoming parts.
 Increase inventory & lead time
 Reduces inventory & lead time.

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Lead time, sometimes called throughput time, is a measure of the time that elapses between
starting a unit of product into the beginning of a process and completing the unit of product.
CHAPTER XII
APPLICATIONS OF JUST IN TIME
 Just in time generally applies to any kind of production

 Producing items only as they are needed by the customer
 Replace large batch sizes with continuous flow of smaller quantities
 Improving process capabilities, reducing setup time,& similar activities which
is useful
 JIT promotes repetitive manufacturing
 Reduction of storage, movement from place to place or inspection
 Quick delivery of products to respond to changes in demand
JIT increases flexibility and responsiveness between suppliers and customers in order to
eliminate waste, improve customer satisfaction,
Japanese terms
There are a number of Japanese terms (words) associated with JIT that you may
encounter. I have listed some below for you:

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 Andon - trouble lights which immediately signal to the production line that there is a
problem to be resolved (typically the line is stopped until the problem is resolved)
 Jikoda - autonomation - enabling machines to be autonomous and able to
automatically detect defects
 Muda - waste
 Mura - unevenness
 Muri - excess
 Poka-yoke - "foolproof" machines and methods so as to prevent production mistakes
 Shojinka - a workforce flexible enough to cope with changes in production and using
different machines
 Soikufu - thinking creatively, having inventive ideas
In the Toyota system the Andon, indicating a stoppage of the line, is hung from the
factory ceiling so that it can be clearly seen by everyone. This coupled with line stoppage
clearly raises the profile of the problem and encourages attention/effort to its solution so that
it does not reoccur.
As an indication though of the difficulty of implementing JIT in a Western

environment when General Motors instituted an Andon for line stoppage workers were
simply not prepared to take responsibility for stopping the line. Hence defective items were
passed though the system, rather than the Andon functioning as planned and highlighting
problems and hence leading to their resolution. General Motors resolved the problem by
allowing workers to indicate that they had a problem whilst the line continued to operate.

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CONCLUSION
 The production environment itself is a control

 Operational details matter strategically
 Controlling WIP is important
 Speed and flexibility are important assets
 Quality can come first
 Continual improvement is a condition for survival

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BIBLIOGRAPHY
This information’s are gathered from following papers:
 JUST IN TIME BY A A.ANSARI

 JUST IN TIME BY TAICHI OHNO
 JUST-IN-TIME MANUFACTURING. MCGRAW-HILL
 TIME ASCENT ARTICLE “BRAIN TESTING"


JIT Production Method Reduces Inventory Costs

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“JUST-IN-TIME”

So too in a manufacturing operation component parts could conceptually arrive just-in-time

to be picked up by a worker and used. So we would at a stroke eliminate any inventory of

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JIT originated in Japan. Its introduction as a recognized technique/philosophy/way

Within Toyota Taiichi Ohno is most commonly credited as the father/originator of

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In this system inventory (stock) is regarded as an unnecessary waste as too is having

 overproduction - waste from producing more than is needed

published each year as well as the cumulative number published.

1.2 Growth of publication about JIT

Figure 1: Growth of publication about JIT

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"human-face" with connotations of worker involvement and participation I personally doubt

it started out that way.

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 elimination of waste in its many forms

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2.1 Transaction cost approach

2.2 Environmental concerns

1. Time—wasted in traffic jams

2.3 Price volatility

2.4 Quality volatility

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2.5 Demand stability

2.6 Supply Stability

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RECONCILING JIT AND EOQ

It is a common misconception that JIT, a Japanese originated concept, is somehow

 Stock used up at a constant rate (R units per year)

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JIT OUTLINE POINTS

 have steady production of clearly defined standard products

It is often said that:

 Materials Requirements Planning (MRP) = a 'Push' system

I believe that this is an incorrect analysis - MRP is a system based on fulfilling

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 JIT manufacturing (production) focuses on production system to achieve value-added

philosophy. JIT considers people to be the organization’s most important resource

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Figure 4 : Elements of JIT

 regular meetings of the workforce (e.g. daily/weekly)

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REQUIREMENTS OF JIT TO ACHIEVE EFFICIENCY

 JIT considers people to be the organization’s most important resource

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CLASSIC JIT DIAGRAM

JIT is an approach designed to minimize inventory cost and increase product

Figure 5 : Classic JIT diagram.

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One plan to expose the problems is simply to:

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repeat the above - hence continuous improvement

 long-term, guaranteed, contract

In return the supplier agrees to

 quality components (e.g. zero defects)

8.1 Supplier selection criteria:

 close to production plant (else potential transportation delays)

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As an illustration of this in 1997 Toyota was affected by a fire at a supplier of brake

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JIT IMPLEMENTATION DESIGN

• The goal of JIT is to eliminate waste in all its forms.