INVENTORY MANAGEMENT

JIT
(Just-In-Time)
PRESENTED BY:

1. P.ARUNA 106
2. PARTE ANJALI 107
3. PATIL ABHIJEET 108
4. PAWDE SEEMA 109
5. PAWAR KIRAN 110
6. NITINCHANDRA 119
INVENTORY:-

Inventory is list of items for goods & materials

available in stock by business.

In accounting Inventory is considered as asset.

CLASSIFICATIONS:

 Raw Material
 Work-In-Progress
 Finished Goods
 Goods for Resale
 Spare Parts
INVENTORY MANAGEMENT

It is a system & process that identify inventory

requirements, sets targets, provides
replenishments techniques & reports actual and
projected inventory status.
OBJECTIVES OF INVENTORY MANAGEMENT

 For Efficient Cash Flow

 To Minimize Investment in Inventory
 To efficiently organize production & sales
operations.
 To maximize the Income
WHY DO WE CARRY INVENTORIES?

 To gain economy in buying.

 To keep pace with changing market condition.
 To stabilize production.
 To prevent loss of sales.
INVENTORY COSTS

1. PURCHASE OR ACQUISITION COST

2. ORDERING OR SET-UP COST
3. HOLDING COST
4. STOCK-OUT COST
SEVEN BASIC TYPES OF WASTE

 Transportation waste
 Process Waste
 Inventory Waste
 Waste of motion
 Waste from product defects
 Waiting time
 Overproduction
JUST IN TIME (JIT)
 
JIT is a philosophy of continuous improvement in which non-
value-adding activities (or wastes) are identified and removed
for the purposes of:
 Reducing Cost
 Improving Quality
 Improving Performance
 Improving Delivery
 Adding Flexibility
 Increase innovativeness
TOYOTA SYSTEM
 JIT is synonymous with Toyota system.
 It was developed when the Company was on the
path of bankruptcy.
 To save the company it was decided to increase
productivity & improve efficiency.
 Material moved only when it was required for
production.
PUSH VS. PULL SCHEDULING
Push Scheduling
• traditional approach
• “move the job on when finished”
• problems - creates excessive inventory
Pull scheduling
• coordinated production
• driven by demand (pulled through system)
• extensive use of visual triggers
(production/withdrawal kanbans)
KANBAN SYSTEM
 Japanese word for card
 Pronounced ‘kahn-bahn’ (not ‘can-ban’)
 Authorizes production from downstream operations
 ‘Pulls’ material through plant
 May be a card, flag, verbal signal etc.
 Used often with fixed-size containers
 Add or remove containers to change production rate
INVENTORY HOLDING UNDER JIT
 PURCHASE IN SMALL LOTS
 VENDORS SELECTION
 IN-PLANT STORAGE
 PRICING PROBLEMS
 MOVING THE MATERIALS
 CONTROL OF PRODUCTION LINE
 REDUCTION OF WASTES
ADVANTAGES OF JIT
 Preventing over-production.
 Minimizing waiting times and transport costs.
 Saving resources by streaming production
systems.
 Reducing the capital with need for the inventory
operations.
 Decreasing product defects.
DISADVANTAGES OF JIT

 Risky
 Expensive
 Stop production
 Affect the goodwill of the
company
 Just-In-Time

Reduction In Inventory & maintenance Cost

Reduction in Production cost

Increase in Profits
EXAMPLES
 A great example of a company using JIT is Dell, which
revolutionized the computer world in the 1990s by selling
“custom-made” computers to customers over the phone and,
later, online. Dell does not possess the raw materials needed
to build a computer until a customer places an order. The
company’s processes and systems enable it to order and
receive inventory and build computers to exact customer
specifications in about the same time it takes competitors to
ship computers sitting on warehouse shelves.
CONCLUSION
Bibliography:
Working Capital Management
-Hrishikes Bhattacharya

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THANK YOU !!