 Production and Inventory  JIT approach  Manufacturing and merchandising

Good morning ladies and gentleman thank you for your listening our presentation, we appreciate our lecturer Mr. Nik Ab Halim to encourage prepared in this assignment, we will illustrate clearly JUST IN TIME system (JIT). Please be attention and listen carefully this topic is very important
Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. When Companies use Just in Time (JIT) manufacturing and inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases are zero. JIT approach can be used in both manufacturing and merchandising companies. It has the most profound effects, however, on the operations of manufacturing companies which maintain

three class of inventories-raw material, Work in process, and finished goods. Traditionally, manufacturing companies have maintained large amounts of all three types of inventories to act as buffers so that operations can proceed smoothly even if there are unanticipated disruptions. Raw materials inventories provide insurance in case suppliers are late with deliveries. Work in process inventories are maintained in case a work station is unable to operate due to a breakdown or other reason. Finished goods inventories are maintained to accommodate unanticipated fluctuations in demand. While these inventories provide buffers against unforeseen events, they have a cost. In addition to the money tied up in the inventories, expert argue that the presence of inventories encourages inefficient and sloppy work, results in too many defects, and dramatically increase the amount of time required to complete a pro


HISTORY OF JUST IN TIME  Just-In-Time is a Japanese manufacturing management method developed in 1970s  First Introduction of JIT by Toyota  Japanese economy to succeed Just-In-Time is a Japanese manufacturing management method developed in 1970s. Because of the success of JIT management. After the first introduction of JIT by Toyota. It was first adopted by Toyota manufacturing plants by Taiichi Ohno. The main concern at that time was to meet consumer demands. it gained extended support and widely used by many companies. many companies followed up and around mid 1970s’. One motivated reason 3 . Taiichi Ohno was named the Father of JIT.

Because of the natural constraints and the economy constraints after World War II. They must create a "defect free" process.for developing JIT and some other better production techniques was that after World War II. There was also a problem of rising cost. The inventory problems included the unused accumulated inventory that was not only unproductive. this included inventory problem. For the product defects. This kind of motivation had driven Japanese economy to succeed. Before the introduction of JIT. product defects. Japanese Manufacturers looked for a way to gain the most efficient use of limited resources. but also required a lot of effort in storing and managing them. According to Hirano. manufacturers knew that only one single product defects can destroy the producer's creditability. equipment breakdowns. they decided that they should produce more diversified goods. Other implied problems such as parts storage. They worked on "optimal cost/quality relationship". group conscious rather than individualism and achieved common goal. large lot production and delivery delays. there were a lot of manufacturing defects for the existing system at that time. life commitment to work. Instead of large lot production producing one type of products. Japanese people had a very strong incentive to develop good manufacturing techniques to help them rebuilding the economy. and uneven production levels. risen cost. the existing system could not reduce cost any further but remember improvement always leads to cost reduction. They also had a strong working ethnic which was concentrated on work rather than leisure. sleeked continuous improvement. 4 .


ELEMENTS OF OF JUST IN TIME ELEMENTS JUST IN TIME PEOPLE INVOLVEMENT  Stockholders and owners of the company PLANTS  Plant layout  Demand pull production  Kanban  Self Inspection  Continuous improvement SYSTEM  Requirement planning  Manufacturing Resource Planning  Labor organization  Management support  Government support 6 .

Demand pull production . 1. but also minimize the chance of creating implementation problem. and also help in financing the implementation of JIT. This is not only reduce the time and effort in implementation of JIT. 2.the plant layout is mainly focus on maximizing working flexibility. It requires the use of "multi-function workers".it means to produce when the order is received.government can show their support by extending tax and other financial help. The attempt to maximize people's involvement may carry through the introduction of quality circle and total involvement concept. This can enhance the motivation.should maintain a good long-term relationship among them. Manufacturers can gain support from 4 sources. Stockholders and owners of the company . 4. Labor organization . managers and all shop floor labor. from all level of management. Plants Certain requirements are needed to implement JIT 1. The ideas of continuous improvement should spread all over the factory.· People Involvement · Plants · System People Involvement Maintaining a good support and agreement from people involved in production. Plant layout . 7 . This can manage the quantity and time more appropriately.all labors should be well informed about the goals of JIT. Government support . 3. this is crucial in gaining support from the them. Management support .

Master production schedule involves what products to be produced in what time. Kanban .it is carried out by the workers at catch mistakes immediately. Two major types are Material Requirement Planning and Manufacturing Resource Planning. 5. production plan and master production schedule. Special inventory and process information are written on the card. MRP is a computer based bottom-up manufacturing approach. This helps tying and linking the process more efficiently. This can allow an organization to improve its productivity. THE GOAL OF JUST IN TIME         JIT Non-value-adding operation Non moving inventories in the production line Lean production Stockless production Capacity Evenly matched Pull system 8 .a Japanese term for card or tag. System This refers to the technology and process that combines the different processes and activities together. Continuous improvement . 4. Self inspection .3.this concept should be adopted by every members in the organization in order to carry out JIT. operation and even customer satisfaction in an on-going basis. This is the most important concept of JIT. service. Production plan involves the management and planning of resources through the available capacity. This involves two plans.

On the other hand. An example of this would be an automobile assembly line. is to minimize the presence of non-value-adding operations and non-moving inventories in the production line. therefore. JIT finds its origin in Japan. This requires that the capacities of the various work stations that the materials pass through are very evenly matched and balanced. It is therefore necessary under JIT to define a process by which the pulling of lots from one station to the next is facilitated. This is based on the fact that wastes result from any activity that adds cost without adding value to the product. The JIT system consists of defining the production flow and setting up the production floor such that the flow of materials as they get manufactured through the line is smooth and unimpeded.e. This necessitates good coordination between stations such that every station produces only the exact volume that the next station needs. the requirements of the next station is what modulates the production of a particular station. but primarily to produce goods so that customer orders are met exactly when they need the products. JIT is used not to reduce manufacturing wastage. Thus. Still. there are some semiconductor companies that don’t practice JIT for the simple reason that their 9 . better on-time delivery performance. JIT is also known as lean production or stockless production. a station pulls in only the exact volume that it needs from the preceding station. lesser space requirement. such that bottle necks in the production line are eliminated. Under such a system. i. and greater profits. who is now referred to as the father of JIT. in the olden days. such as transferring of inventories from one place to another or even the mere act of storing them. Another important aspect of JIT is the use of a 'pull' system to move inventories through the production line. where it has been in practice since the early 1970’s. This will result in shorter throughput times. lower costs. lower dpm’s. wherein every car undergoes the same production process as the one before it. It was developed and perfected by Taiichi Ohno of Toyota. is a management philosophy aimed at eliminating manufacturing wastes by producing only the right amount and combination of parts at the right place at the right time. thereby reducing material waiting time. The goal of JIT. Taiichi Ohno developed this philosophy as a means of meeting customer demands with minimum delays. This set-up ensures that the materials will undergo manufacturing without queueing or stoppage. JIT is most applicable to operations or production flows that do not change. higher equipment utilization. or JIT. since the key behind a successful implementation of JIT is the reduction of inventory levels at the various stations of the production line to the absolute minimum.Just-In-time manufacturing. those that are simply repeated over and over again. JIT has likewise been practiced successfully by some semiconductor companies..

operations are too complex for JIT application. that’s precisely the challenge of JIT – creation of a production set-up that is simple enough to THE OBJECTIVES OF JUST IN TIME  Identify and response to customer needs 10  Optimal quality relationship  Reduce unwanted waste . On the other hand.

in the long run. this objective will help the firm on what is demanded from customers. 4. 2.1. Wastes that do not add value to the products itself should be eliminated. Customers’ needs and wants seem to be the major focus for business now. 3. The organization should focus on zero-defect production process. reworking and the production of defected goods. Reduce unwanted wastes. A good and long-term relationship between organization and its suppliers helps to manage a more efficient process in inventory management. Although it seems to be unrealistic. Optimal quality/cost relationship. material management and 11 . it will eliminate a huge amount of resources and effort in inspecting. Develop a reliable relationship between the suppliers. Identify and response to consumers needs. and what is required of production.

Plant design for maximizing efficiency. 5. Processing waste 6. Seven Types of Waste to Eliminate: 1. Reduction of Wastes. adjustments of JIT objectives for each form should be made in order to complement the overall production process. These major objectives are suitable for all organizations. It will also assure that the supply is stable and available when needed. It will help the organization to remain competitive in the long run. 7. Waste of motion 7. Commit a longterm continuous improvement throughout the organization. JIT helps significantly in reducing wastes. Waste from product defects JIT can help organization remains competitive by offering consumers higher quality of products than their competitors. Transportation waste 4. Adopt the work ethnic of Japanese workers for continuous improvement. 12 . But each organization is unique in some way. Inventory waste 5. 6. The design of plant is essential in terms of manufacturing efficiency and utility of resources. Waste of waiting time 3. it is very important in the survival of the market place. Waste from overproduction system.

d. and may result in a positive attitude about the change over. This will make the workers feel involved in the implementation. Once a reduced setup time is achieve the system now has the ability to more 13 . Schedule meetings on a regular basis with the workers to gather information on problems as well as a possible possible solutions. This could mean redesigning several areas such as the product or the process itself. and other suggestions (Beasley. A good rule is to be able to change the setup in a single digit time frame. J. Although many companies seek help from consultant firms for the difficult task ahead. there are many key points that they can address themselves (Just-In-Time Manufacturing). n. Setup time is an issue that each company can look to improve its efficiency. Changing Changing over the current output production in the company’s factories to limited or constant quantity is a good start in the process to determine exactly how many resources are going into making a certain amount of products.).. E.IMPLEMENTATION AND INTEGRATION Just In Time manufacturing Changing Work Station Just in Time manufacturing Just-in Time manufacturing is difficult to setup because each company needs to personalize for their type of company to fit their specific needs.

work stations can be moved closer together. This can include training on several machines. Although the kanban system is not required in a JIT system it is a good organizational tool to help eliminate misunderstandings and increase communication. As well as the amount of time a part is waiting to be processed at an individual station can be lowered. this will require deliveries of materials to be more often. Using down time is also another way to help with productivity and efficiency. This makes the most of the workers time and can help to prevent future breakdowns do to lack of maintenance. Reducing time in between the transportation of the individual parts can also improve the efficiency. Finding a supplier closer to the factory or convincing one to relocate closer will also reduce lead time. Work station To accomplish this. ability to maintain the machines. These points are things the company can control and improve to help the successful integration of the JIT system. 14 . However. While a worker or machine is waiting for other parts of the system to be used maintenance can be performed on the machinery. Provide the workers with more responsibilities and training.efficiently produce smaller batches of products. and perform correct inspection This will make the companies work force more versatile and can help with issues of absences.

as the result. so they don’t have to worried about losing money. 3. 2. 5.Long-term relationship 4. 4. Reduced waste 8. Reduces the need for central warehousing and storage 2. More personal relationship with suppliers – – Effective communication between them can provide less wrong information. Lowered variety in suppliers – Can provide less wrong information between the supplier 15 . Long-term relationships that help to certify suppliers Make the suppliers believe in the agreement between the contractors. Reduces the need for central warehousing and storage – All items used instantly after brought from factory. Receiving Inspection 5.Relaible delivery in supplier BENEFITS OF JUST IN TIME 7. Receiving inspection is reduced and in some cases eliminated – Inspection on the storage less because all the materials used instantly after being brought from the factory. More personnel relationship with supplier 3.1.High quality material Kanban (JustIn-Time) helps companies solving many Manufacturin g problems 1. stores not been used a lot. Lowered variety in supplier 6.

Reliable delivery schedules – More effective on delivery of the materials. High quality materials used – Materials used do not have damage or spoils that can cause low quality of the products. Toyota capabilities are listed below. all the workers can provide more quality in work. these systems are highly flexible and responsive to customer requirements. These systems are more flexible. 7. and profitable than traditional manufacturing systems. high quality. As a consequence. The cost of design and implementation is usually recovered within the first year from inventory savings. Kanban (Just-In-Time) helps companies solving many Manufacturing problems. Kanban Just-In-Time impact on whole Toyota production approach as following: (a) Standardized work (b) Quality Improvement (c) Continuous Improvement Toyota manufacturing processes route the product around the plant to various work centers where work is staged to be processed. therefore. and short cycle times. The benefits of bringing the processes to the product and discussing the value of simulation as a tool to design and predict cell performance prior to implementation. responsive. Kanban derives it name from the manufacturing systems and processes implemented at Toyota Motor Manufacturing that are so effective at producing at low cost. 16 It is best to start with a Kanban . Reduced waste – Decreased the amount of spoiled or damaged materials that been used during the time. 8. reducing financial and technical risk to the company.6. Toyota Production System implements all the elements of Kanban Manufacturing directed at elimination of manufacturing. Implementing manufacturing cells typically increases net income dramatically and reduces cycle time over 50%.

· Traditional Approach The traditional approach in manufacturing is to store up a large amount of inventory in the means of backing up during bad time. it is somehow different for implementing in western countries. DRAWBACK OF JUST IN TIME (JIT)  Culture differences  Traditional approach  Difference in implementation  Loss of individual autonomy  Loss of team autonomy  Loss of method autonomy  JIT success  Resistance to change JIT  Relationship between management and employees  Employee commitment Employees  Production level JIT  Employee skill JIT  Compensation should be set on time based wages  Drawbacks of American automotive · Culture Differences The organizational cultures vary from firm to firm. Once the plan is developed the system will be implemented. Those companies rely on safety stocks may have a problem with the use of JIT.implementation which usually involves an assessment of current operations.  Difference in implementation of JIT Because JIT was originally established in Japanese. 17 . The benefits may vary. There are some cultures that tie to JIT success but it is difficult for an organization to change its cultures within a short time.

Resistance to change JIT involves a change throughout the whole organization. however. to enhance the quality as their ultimate goal. The most common resistance are emotional resistance and rational resistance. This allow the workers to concentrate on building what the customers wants. and to see JIT as a way to compete rather than method used by managers to increase their workload. They came across several problems including strikes and the suppliers inability to supply the materials demanded 18 . but human nature resists to change.  Loss of method autonomy It means the workers must act some way when problems occur.    Production level JIT works best for medium to high range of production volume. Drawbacks of American automotive companies such as Ford and General Motors have implemented JIT into their production. Loss of individual autonomy This is mainly due to the shorter cycle time which adds pressures and stress on the workers.   JIT success is varied from industry to industry Some industries are benefit more from JIT while others do not. this does not allow them to have their own method to solve a problem. Employee skill JIT requires workers to be multi-skilled and flexible to change.  Relationship between management and employees is important A mutual trust must be built between management and employees in order to have effective decision making. Compensation should be set on time based wages. Emotional resistance are those psychological feeling which hinder performance such as anxiety.  Loss of team autonomy This is the result of decreasing buffer inventories which lead to a lower flexibility of the workers to solve problem individually.  Employee commitment Employees must commit to JIT. not as smoothly as Toyota. Rational resistance is the deficient of the needed information for the workers to perform the job well.

A similar problem took place with General Motors in 1996 resulting in them temporarily closing over twothirds of their plants. along with single source suppliers. Ford experienced a problem with a JIT supplier that may have cost them tens of millions of dollars. Since JIT is a stockless production system it leaves the company at the mercy of the suppliers. or strike.(Glenn. T. After the strike was over the supplier had to speed up production to meet General Motors needs resulting in a large amount of defective products. any natural or unnatural disaster at any critical supply plant whether it's a flood. 2001).that shuts off the flow of materials from that critical plant to the assembly process can shut down a manufacturing operation in a matter of hours. This seventeen day strike resulted in General Motors loosing between 600-800 million dollars in profits. fire. and lower costs. "JIT manufacturing. Their supply company had a seventeen day strike and without having any emergency or back-up materials there was nothing that could be done to correct the problem. creates terrific manufacturing efficiencies. but nothing productive was taking place. Even after the strike was over there were still complications for some time. So the plant was still costing money to run. They had to shut down six plants leaving many workers with nothing to do. Unfortunately. A statement by Keith Crain of Automotive news sums up these problem very well. 2001) 19 . the downside is it creates and Achilles' heel for manufacturers. T. quality improvements."(Glenn.

responsive. this system has more flexible. TOYOTA reducing financial and technical risk to the company. However they can differ from company to company. If you conduct JIT system there are many advantages of that a manufacture can receive from JIT. for example like TOYOTA that company got the effective and efficient of JIT system. Its clear this system support your company when you used the right why. The right way is you have to know how to use this system. eliminate of waste and profitable than traditional manufacturing system.  Possible increase in profits 20 . when they used JIT. it is best to star with a JIT implementation which usually involve an assessment of current operation.Flexible Eliminate Waste SUGGEGTION Responsive Profitable Our suggestion is better when the companies to using JIT system as the right way when they uses the right way they can get the advantage of this JIT system .

In reality it is a very complicated technique that takes long term commitment and a initial cost with no guarantee of success. The advantage of JIT we cannot summarize here because it has many advantage when you conduct this system the condition is you have to know how to use it. It helps significantly in reducing wastes for example: waste from overproduction. When looked at it appears to be a very simple. Because of the success of JIT management.       Quality products Quicker setup Eliminates costs of storage facilities More flexible employees Quality relationships with suppliers Elimination of waste CONCLUSION JIT Manufacturing Advantage of JIT Deference Culture Just-in-time manufacturing can be a positive influence on a company. If implemented successfully it would eliminate waste. Taiichi Ohno was named the Father of JIT. quick. inventory waste. make the company more productive and more efficient. waste of motion. many companies are not. Although there are many companies that are successful. processing waste. waste from product defects. transportation waste. Even though there are enormous risks many still consider implementing JIT for it many advantages. and easy thing to do. The first country developed JUST IN TIME was Japan in 1970’s It was first adopted by Toyota manufacturing plants by Taiichi Ohno. It does this through shorter transportation and increased communication. waste of waiting time. I would like to illustrate some advantage of JUST IN TIME. 21 . However there are many risks associated with attempting to implement JIT manufacturing techniques. The main concern at that time was to meet consumer demands.

u can see there clearly the disadvantage of JUST IN TIME References Kreitner. Seventh Edition.). Management. Houghton Mifflin Company: Boston. 2004 from . Just-In-Time Manufacturing Global Kitting System (n.. Web site: http://www. Just-In-Time (JIT). 1998. J. Productivity press. USA. The organization cultures vary from to firm. Retrieved March 2. & Yasaki. Robert. Loss of individual autonomy this is mainly due to the shorter cycle times which add pressure and stress on the worker. There are some cultures that ties to JIT success but it’s difficult for and organization change its culture within a short time.d. Sterling Publishing Co Inc. Retrieved April 02.ic. if u want more info about the disadvantage JIT u can read the above page 11. Berk Total Quality Management: Implementing continuous Improvement. or. Toyota Production System & Lean Manufacturing: Origins & Lauder. (1993) Toyota Management System: Linking the Seven Key functional Areas . E.. JIT system actually its real system but the problem is if u do not know how to use it u cannot get the effective and efficient in this system .bsu. The Ideal Manufacturing Scene for Your Business: Portable Kitted Parts Can be a Crucial Part of Smart Supply Chain Management to Supply Chain Management to Support Just-in-Time Manufacturing Processes. Parsons.2004 from . Y. (2001). Just In Time.New York NY. Portland .globalkitting.. Web site: Monden. G. Retrieved April 22 .d. R.shtml No Author (n.html Glenn. 2004 from. T.). Weber. Website: http//www. and S.The most problems when the companies tried to conduct in the JIT it are the difference culture. (n. Web site: http://www. J. Beasley J.)..

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