JUST IN TIME

&
SCM
By,
Divya Lekshmi P
 JIT & SCM
 SCM is a concept involving the integration of all the
value-creating elements in the supply, manufacturing,
and distribution processes, from raw material
extraction, through the transformation process, to end
user consumption.
 The supply chain
Raw material/extraction

Ultimate sale/delivery to the final consumer

JIT & SCM
 JIT & SCM (cont…)
 SCM is a process oriented, integrated approach to
procuring, producing, and delivering products and
services to customers, covering the management of
material, information and financial flows.

 JIT can be transferred to an entire supply chain

management.
 Why JIT?

 Inventories – a type of investment

 Types of inventories
 Cost of inventories
 Factors leading to inventory waste
 Just In Time
 Introduced in the TOYOTA production system for
the purpose of eliminating waste, during 1950’s and
1960's.
 Kiichiro Toyoda, the Father of Japanese Automobile
Industry was the one who conceived the idea of JIT.
 Taichi Ohno is responsible for the successful
implementation of JIT.
 JIT principles can be used to increase the
effectiveness of SCM
 Just In Time
“ A philosophy of manufacturing based on planned
elimination of all waste and continuous 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 of conversion from raw material
onward. The primary elements include having only the
required inventory when needed; to improve quality to
zero defects; to reduce lead time by reducing setup times,
queue lengths and lot sizes; to incrementally revise the
operations themselves; and to accomplish these things at
minimum cost.“
- APICS
 Just In Time
 “ JIT is a broad management philosophy that seeks to
eliminate waste that results from any activity that adds
cost without adding value, by producing the right part in
the right place at the right time ”
(Ohno,1988)
 “JIT seeks to improve profits and return on investments
by reducing inventory levels and cutting unnecessary
inventory, reducing variability, improving product
quality, reducing production and delivery lead times, and
reducing other costs such as those associated with
machine setup and equipment breakdown”
(Liker,2004)
 JIT Philosophy
 JIT system a combination of JIT purchasing, JIT
manufacturing & JIT inbound logistics
 An entire philosophy that must be observed in order
to avoid the downfalls
 JIT Philosophy

 First sell it, then make it – Stockless/Zero inventory

 Push & Pull methods
 Reverse order – Lean production
 Eliminate Waste
 Aimed at to produce and deliver finished goods just
in time to be sold, subassemblies just in time to be
assembled in to finished goods, fabricated parts just
in time to go into assemblies, and purchased
materials just in time to be transformed in to
fabricated parts.

 Elements of JIT –
1.Continuous improvement
 Attacking fundamental problems - anything that does not add
value to the product.
 Devising systems to identify problems.
 Striving for simplicity - simpler systems may be easier to
understand, easier to manage and less likely to go wrong.
 A product oriented layout - produces less time spent moving
of materials and parts.
 Quality control at source - each worker is responsible for the
quality of their own output.
 Pokayoke - `foolproof' tools, methods, jigs etc. prevent
mistakes
 Preventative maintenance, Total productive maintenance -
ensuring machinery and equipment functions perfectly when it
is required, and continually improving it.
2.Eliminating waste

 Waste from Overproduction

 Transportation Waste
 Processing Waste
 Waste from Product Defects
 Waste of waiting/idle time
 Inventory Waste
 Waste of Motion
3. Good housekeeping
 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)
4. Set-up time reduction
5. Levelled / mixed production
6. Kanbans
7. Jidoka
8. Andon
 JIT Goals and Building Blocks
Ultimate A
Goal balanced
rapid flow

Supporting
Goals
Eliminate disruptions
Eliminate waste
Make the system flexible

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks
 Building Blocks
 Product Design
 Process Design
 Production Flexibility
 Quality Improvement
 Personnel/Organizational Elements
 Manufacturing Planning and Control
 Goals of JIT
Inc. Reduce Zero Defect
productivity costs process

Waste elimination Efficiency Optimal cost/quality

relationship

Respond to Competi Reliable relationship

customer needs tiveness with suppliers
Continuous Flow Production
Traditional Flow
Production Process
(stream of water)

Suppliers
Customers

Flow with JIT Inventory (stagnant

ponds)
Material
(water in
stream)
Suppliers
Customers
 Pre requisites of JIT system
 Purchasing
• Must cultivate a limited number of highly-reliable
suppliers/vendors with long term partnerships.
• Using local suppliers to reduce replenishment cycle time.
• Suppliers must be particularly strong in lead time
dependability and quality.
• Quality at the source must be ensured by preventing defects
and doing it right the first time, along with eliminating
incoming inspection.
• Suppliers must have knowledge of production and
inventory of buyers to plan their own production.
• Online electronic data interchange system is essential for
real time communication of information.
 Transportation
◦ Delivery schedules and turn around times of high discipline
are required in JIT system

 Warehousing
◦ Focus on material movement not on material storage.
Hence, emphasis must be on the ability to move material
quickly and efficiently as against automated storage
systems.
◦ Parts and components must be delivered in fragments
directly to the point of use.
 Inventory Control
◦ Elimination of safety stock
◦ Reduction of errors in inventory system
◦ Trade off between order size and time phased intended use;
and
◦ Low variety and stability of demand.
 Production
◦ Small production lots
◦ Short production run
◦ Rapid set up time
◦ Flexible manufacturing system
 Inventory Control
◦ Elimination of safety stock
◦ Reduction of errors in inventory system
◦ Trade off between order size and time phased intended use;
and
◦ Low variety and stability of demand.
 Production
◦ Small production lots
◦ Short production run
◦ Rapid set up time
◦ Flexible manufacturing system
 Traditional Mass Production
Big lot sizes
Lots of inventory
”PUSH” material to next
stage
Big purchase shipments

???

Lower
per unit
cost

Big “pushes” of finished goods

to warehouses or customers
 After JIT - Lean Production
• Tighter coordination along the supply chain
• Goods are pulled along-only make and ship what is needed

Smaller lots
Faster setups
Smaller shipments Less inventory, storage space
”PULL” material to next stage

Minimal
or no
inventory Goods are pulled out of
holding plant by customer demand
cost
 Advantages of JIT
 Inventory levels are drastically reduced.
 Process time, space requirement and set up time are reduced
considerably
 Leads to time based competition using speed as a weapon to
capture market share
 Eliminating waste by prohibiting overproduction, waiting,
undue warehousing and handling facilities, and defective
production.
 Improve customer service and commitments, bringing
competitive advantage.
 Improve productivity.
 Motion of efforts by greater employees participation and
motivation.
Companies using JIT
 Hero Honda
 Maruti
 Bajaj Auto
 Tata Motors
 JIT II
 JIT II - a supplier representative works right in the
company’s plant, making sure there is an appropriate
supply on hand.
THANK YOU