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Mar 17, 2010

What is just in time?

Just in time (JIT) is the theory that materials are delivered to the point of use at the right time and in the right quantities.The goals of JIT are minimize waste related to inventory, stock should be delivered 'just in time.' Stock is simply brought in or created as and when required. There are various wastes associated with inventory for example in transactional processing, storing what is not yet required, management resource. JIT tries to focus on material at the right time at the right place in the right amount.

The benefits of using JIT principles.

1. Over Production Ceases - components are typically made to order not stock

2. Labour Costs Are decreased- The company saves because it is not paying workers to produce items that have no immediate use. Staff are focused only on the material at hand.

3. Relationships With Suppliers become strategic - Suppliers have to have a positive and inter-dependent relationship with the manufacturer, rather than the historic relationship where the customer had the power and the supplier was not an equal.

4. Motivated Workforce - Staff are motivated by specific goals and targets related to the manufacturing targets.

5. Improvement in scheduling and forecasting - JIT requires adequate focus in scheduling and forecasting (getting these wrong means that you'll have problems in getting the correct inventory at the right time).

6. Material Flow improves - JIT typically includes some rationalization of lot sizes - this facilitates better management of inventory and reduced delays in completing lots for distribution.