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Apr 30, 2010

The Benefits Of ‘Just-In-Time’

Just-in-time(JIT) manufacturing is a simple theory that stock that is housed within any company is waste and any over production of goods is also waste. Stock should be delivered and row material ‘just in time’. So there is no stock or row material being stored in any quantity, they are all simply brought in or created as required.

But what are the benefits of JIT within the manufacturing process apart from the cost reduction of accommodating stock and produced goods?

Over Production Ceases

Fundamental to the process of JIT manufacturing is that goods are not over produced. When they are over produced then they need to be transported to a storage facility and then stored until they are required.

Both these actions require staff time and effort. In addition, each time that goods are moved there is a chance that they will be damaged, so reducing the number of times that manufactured goods are transported/stored minimises the risk of damage.

Less transport also means less resources are used, which is very much in keeping with the Lean business philosophy of reducing waste and using resources sparingly.

Not having to store produced goods also means that there is less resources used to store them. When they are stored some degree of heating/lighting, security is required and again these take up resources.

Overproduction of goods can sometimes hide flaws within the production process, so reducing over production means that any flaws are immediately apparent, which in turn leads to quality improvement.

Flow Of Goods Improves

Because goods are not over produced and are produced in the right timescale, overall within the manufacturing process there is a better flow of goods, because there is no over production of any one item.

Workers Are Multi-Skilled

In order to meet the requirements of JIT manufacturing, workers have to be trained to be flexible and to be able to undertake duties that may be in areas other than their usual workstation. This means initially there are some training costs, but having a workforce that is so flexible and skilled that workers can be deployed to different work areas when required is highly desirable.

Labour Costs Are Reduced

Through production of goods only when required staff are not paid for non- production, thus saving the company costs. Usually staff will be deployed into other areas of work, so that they will still earn money, but the company saves because it is not paying workers to produce items that have no immediate use.

Positive Relationships With Suppliers

Suppliers will also benefit from JIT manufacturing because they too will be expected to supply using JIT principles. This means that they 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.

Motivated Workforce

The JIT manufacturing process is one that is highly focussed on targets, deadlines, quality and so on. Usually JIT is only one aspect of the Lean philosophy of ensuring that waste is eliminated in all its forms. Staff are therefore kept motivated by the goals, targets and even reward systems that may be in place to ensure that they continuously strive to effect improvement in all aspects of their work.

Lean is a culture that is very much focussed on quality and this culture can become a real driving force within the personnel of any company, which also spins off into JIT being viewed as a positive way of keeping the company financially viable and ahead of its competitors.