What is JIT Inventory?
The minimum amount of inventory
necessary to keep a perfect system
running smoothly
Objective is to minimize the stock of
parts and components by having them
delivered just in time for production and
to limit the inventory of finished goods
by producing them just in time to fill
demand
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Push/Pull View of Supply
Chains
Procurement, Customer Order
Manufacturing and Cycle
Replenishment cycles
PUSH PROCESSES PULL PROCESSES
Customer
Order Arrives
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What is Just-in-Time (JIT)?
Supplies and products are pulled
through system to arrive where they are
needed, when they are needed
A management philosophy of
continuous and forced problem-solving
via a focus on throughput time and
reduced inventory
JIT’s mandate: Eliminate all waste!
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Examples of Waste
Waste is “anything other than the minimum amount of
equipment, materials, parts, space and worker’s time,
which are absolutely essential to add value to the
product.”
• Shoichiro Toyoda, President, Toyota
Watching machine run (idle time)
Waiting for parts (queue)
Counting parts (overprocessing)
Overproduction
Moving parts over long distances
Storing inventory
Looking for tools (motion)
Machine breakdown (idle time)
Defects
4
What Does JIT Do?
Exposes problems and bottlenecks
caused by variability associated
with poor processes and customer
demands:
• Eliminate waste
• Remove variability
• Improve throughput
5
Basic Elements of JIT Production
Pull production system
Kanban production control
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Basic Elements of JIT Production
Pull production system
Kanban production control
Small lot size inventories
Small lot production and level schedules
Quick setups
Flexible resources: equipment and workers
Cellular layouts
Quality at the source
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Quality At The Source
Quality by suppliers
Quality within firm
Quality of design: poka-yoke prevents
defects
Undercapacity scheduling allows for
planning, problem solving &
maintenance
JIT exposes quality problems by
reducing inventory
JIT limits number defects with small lots
8
Empower Employees
Essence of JIT is willingness of workers to
• spot quality problems
• halt production when necessary
• generate ideas for improvement
• analyze problems
• perform different functions
JIT requires TQM!!
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Basic Elements of JIT Production
Pull production system
Kanban production control
Small lot size inventories
Small lot production and level schedules
Quick setups
Flexible resources: equipment and workers
Cellular layouts
Quality at the source
Preventive maintenance
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Preventive Maintenance (PM)
Breakdown maintenance
• repairs to make failed machine
operational
Preventive maintenance
• system of periodic inspection &
maintenance to keep machines
operating
JIT requires reliability!
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Basic Elements of JIT Production
Pull production system
Kanban production control
Small lot size inventories
Small lot production and level schedules
Quick setups
Flexible resources
Cellular layouts
Quality at the source
Preventive maintenance
Supplier networks
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Trends In Supplier Characteristics
Reduced number of suppliers
Nearby facilities
Repeat business; long term contracts
Provide
analysis to enable desirable suppliers
to become or stay price competitive
Certify
suppliers and make payments at
regular intervals rather than upon delivery
Help suppliers meet quality requirements
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Benefits Of JIT
1. Reduced 7. Greater flexibility
inventory 8. Better relations
2. Improved quality with suppliers
3. Lower costs 9. Simplified
4. Reduced space scheduling and
requirements control activities
5. Shorter lead time 10. Better use of
6. Increased human
productivity/less resources
waste 11. More product
variety
14
JIT Implementation
Use JIT to finely tune an operating
system
JIT isn’t for everyone:
• Global supply chains
• Union restrictions
• High volume/low cost items
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