Just-in-time
Over a million managers and consultants are working together on management issues via 12manage each month...
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Just-in-time |
Over a million managers and consultants are working together on management issues via 12manage each month... |
Supply Chain Planning. Explanation of Just-in-time philosophy of Taiichi Ohno. ('70) |
What is Just-in-Time? DefinitionJust-in-time was pioneered by Taiichi Ohno in Japan at the Toyota car assembly plants in the early 1970s. It is a manufacturing organization philosophy. JIT decreases waste by supplying parts only when the assembly process requires them. At the heart of JIT lies the kanban, the Japanese word for card. This kanban card is sent to the warehouse to request a standard quantity of parts as and when they have been used up in the assembly/manufacturing process. JIT requires precision, as the right parts must arrive "just-in-time" at the right position (work station at the assembly line). It is used primarily for high-volume repetitive flow manufacturing processes.
History of Just-in-TimeHistorically, the JIT philosophy arose out of two other things:
The Just-in-time framework regards inventories as a poor excuse for bad planning, inflexibility, wrong machinery, quality problems, etc. The target of JIT is to speed up customer response while minimizing inventories at the same time. Inventories help to respond quickly to changing customer demands, but inevitably cost money and increase the needed working capital.
In 1990 James Womack wrote a book called "The Machine That Changed The World", introducing the terminology 'Lean Manufacturing'. Also you may encounter the word: 'Lean Production'. The principles behind these approaches do not substantially differ from the techniques developed by Ohno at Toyota.
Attention Areas of Just-in-TimeTypical attention areas of JIT implementations include:
External extended Just-in-TimeThrough the arrival of Internet and Supply Chain Planning software, companies have in the mean time extended Just-in-time manufacturing to outside the company borders. By demanding from their suppliers to deliver inventory to the factory only when it's needed for assembly, making JIT manufacturing, ordering and delivery processes even speedier, more flexible and more efficient. In this way, Integrated Supply Networks (Demand Networks) or Electronic Supply Chains are being formed.
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Compare with: Kaizen | Deming Cycle | Scientific Management | Six Sigma | Value Chain | Value Stream Mapping | CPFR | Bricks and Clicks | Delta Model | 3rd Party Logistics (3PL) | RFID Technology
Return to Management Hub: Change & Organization | Supply Chain & Quality
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| └► Charles Shillingburg (USA) | JIT in Variable Markets | "I would need to have more information about what the process(es) is/are to solve this. Can line balancing be employed? Can you set up a supermarket?" | |
| └► Beddoe (Wales) | JIT in Variable Markets | "We essentially are merchants of stock glass, essentially a "supermarket" for our customers. There is little manufacturing at our site that impacts on the stock control. I'm looking at patterns within the ordering of our customers and I'm finding little to work with however stock levels being maintained are way too high at present. Lead times are one/two days from order to delivery which makes this problem even worse as we are limited on where we can source the product. What we have is essentially a pull from the customer with random products and quantities. We are now limited on space and need to generate space for an essential change to our business. Since the last post I've been looking at demand smoothing and setting up a network between the two other sites within our region to act as satellite sites for slower moving items. I've also looked at creating a more formal "pull system" for the stock control with a kanban for each product. Thanks for your reply." |
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| └► Atulan Lahiri (India) | JIT in Variable Marketplaces | "Obviously if 2 days of order fulfilment lead time is industry norm, you have little time to react. Your cash position is tight. Why not try something like Dell? Increase your reaction time say by 5 days to up to a week and offer better prices that will be funded by your reduced inventory costs and interest burden? I am not realy to believe customer is so crazy about the order that he cannon wait for 5 more days for a better price, if he really cannot, it means his own business is in mess, he has practically no control over his business. In that case, you will have to understand the reasons behind such rigid behaviour from his end, what is his planning visibility, so on. Whatever be the case, I strongly believe you can add value to your customer and it's not a bad idea to steal concepts from Dell (reduced variability and price against longer lead times), P&G (CPFR, know your partners' pains), Saint Gobain (renegotiate payment terms)." |
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| └► Beddoe (Wales) | JIT in Variable Markets | "Thanks - the methods I was looking at for demand smoothing are similar in that I was looking at offering discounts for customers to place orders in advance (i.e. for all their weekly/monthly requirements)." | |
| └► Atulan Lahiri (India) | JIT in Variable Markets | "I don't want to sound cliched, the point is JIT and other lean principles are typically efficiency enhancement tools. But, they are of limited relevance if basically things are not in place - in other words the effectiveness paradigm. If you continue to be constrained by market determining forces (price, supply lead times, package offerings, etc), there is no point in silently witnessing the daily strains in your internal business processes. Money is the most critical "commit" decision. If that is being lost in the process, not much else if of help here. I guess you can make operational improvements only to the extent you are not funding your customer's business (like the goof ups in stocking inventories, releasing your pos on vendors early on, the mismatch of credit terms between vendors and customers, so on). You may write to me personally at atulan3@yahoo.com to discuss more. My work is more about implemeting things at the ground level than merely ideating and creating scenarios." |
| └► Emidio J. Friggieri (Malta) | Lean & JIT | "Lean & JIT are complimentary to each other but not totally dependant on each other. In one particular process we managed to reduce the number of steps from 19 to 5 over a period of time. We made the process much more lean by reducing WASTE (MUDA). This does not mean that we have achieved a just in time supply of the material which we have to import from Europe and China. However we can say that we reduced the amount of WIP by starting from first assembly steps and continuing all the way to packing with little inventory in between to balance steps. These is more to be done. I hope this clarifies." | |
| └► Pandurang Koppal (UAE) | Kanban & Procurement Planning | "There is a slight difference between their characteristics: - Kanban mainly stresses the continuous of flow of material. This is mainly used in assembly or batch process industry. - In procurement planning: the work starts from planning, scheduling & strategic decisions." |
| └► Eric Schmitz (Belgium) | Lean is not JIT | "JIT is only one of the tools of Lean. Lean itself a total business strategy! So you can have a lean business strategy, operational plan and so on that does not have JIT." | |
| └► Pascal De Roock (Belgium) | Lean and JIT Manufacturing | "Yes there is a difference even more this are two different things! Lean is a strategy based upon: 1) Elimination of all waste (8points) 2) Continuous improvement 3) Customer service and last but not least respect for people. JIT is like it says: just in time => is perfectly possible with a lot of stock and unnecessary process steps. In my opinion JIT is not one of the tools of lean, for me it's also a strategy you choose. But it can help you to make the company more "lean"." |
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| └► Rino Di Nicola (Italy) | Lean and JIT | "Lean is a way to think while JIT is a tool to do this one" | |
| └► Chris (USA) | Three Philosophies of Lean | "I always teach my classes that in order for a company to be lean they need to adopt three philosophies: - JIT which is to have only the inventory that is needed at the place it is needed, - TQM, concentrating on continuous improvement. - Theory of Constraints. There is also the need to an understanding that this extends through the supply chain as well your own company." |
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| └► Rajeev Kumar (India) | JIT Part of TQM | "The four guiding principles of TQM are: - delight the customer - management by fact - people based management - continuous improvement JIT is a one of the management methods of TQM to achieve the four principles of TQM. Toc is all about finding the constraint in the system and exploit it to full extent." |
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| └► Sabari H. Nath (India) | JIT and Lean | "Lean is defined as producing the right parts, in the right place at the right time. JIT is one of the ways of achieving lean. JIT always focuses on implementation of 5S (Sort, Segregate, Shine, Standardize, Sustain) and Kaizen (Continuous Improvement)." |
| └► Addae Michael (Ghana) | Underlying Reasons for JIT | "In my candid opinion JIT saves unnecessary cost incurred on stocking manufacturing materials in warehouses which include labor cost, cost on wear and tear and so forth. JIT therefore ensures prompt response to inventory requirements at less cost, In much the same way, finished products must be evacuated and distributed immediately to avoid holding cost. In principle I think JIT theory entails an in depth value chain analysis." | |
| └► Jose (Spain) | JIT implementation | "Correct, but nothing is perfect, not JIT. If manufacturer uses JIT to avoid stockage, who will keep the inventories: of course, the supplier! If we, as manufacturers, want quick reaction to changes in demand, somebody must have our prime matters stocked ready to be delivered when required: our supplier! Be careful, we can loose suppliers if we don't take care of them. Supplier-Manufacturer is a chain that must be solid and both must act as a TEAM." | |
| └► William P. Gibbs (USA) | JIT | "I agree, JIT is most effective when applied to the entire supply chain. If upstream suppliers are not producing to a clear "pull" signal then they quickly become repositories of muda." | |
| └► Dela Agbo (Ghana) | Challenges Rather Than Disadvantages | "If one sees JIT as a system of 'zero inventory' then one can have series of disadvantages in operating such a system. In fact such as system can best be described as ‘recipe for disaster’ However, if one sees JIT as a philosophy that is built on 'pull system' or on waste elimination or as a philosophy where other concepts like Kaizen, zero-defect, teamwork, quality circles and even TQM feed into, then one should be talking about ‘challenges’ and not ‘disadvantages. Even the challenges ultimately become incentive for alertness, continual improvement and excellence. A ‘pull’ system implies striving for information excellence and so ‘no surprises. Built in the JIT philosophy is the ff: Resilience, agility and ‘leagility’ [combining lean and agile]. The JIT philosophy therefore requires discipline; a call to duty for excellence. I see JIT as a means to an end of zero inventory; RATHER THAN an end of zero inventory in itself." |
| └► Tim Walton (UK) | Benefits of JIT | "Here's another list of JIT benefits: - Smaller inventories - Improved quality - Reduced space requirements - Shorter lead times - Lower production costs - Increased productivity - Increased machine utilization - Greater flexibility" |
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| └► Balaji Raghunathan (India) | New Perspective on Processes | "The greatest advantage of lean manufacturing is that it brings a whole new perspective at the way people look at their processes. It opens a lot of avenues for kaizen, change-over time reduction, ergonomic improvements, de-bottlenecking, lay-out changes, defect elimination, etc.," |
| └► Aynul Hoque (Bangladesh) | Disadvantages of JIT | "JIT is only effective where no exogenous factors. Rather it should be blended with environmental factors." | |
| └► Greg Gardner (USA) | Great in theory - but challenging in todays economic crunch | "JIT - the concept is on shaky grounds these days. There once was a day when businesses would plan and inventory ordered and delivered on a timely basis. Nowadays, forecasting and inventory management delivery systems are essential - but processes must be managed with a back delivery plan. Otherwise we get MAJOR breakdowns by not having what we need on time." | |
| └► Hassanali Rassouli (Iran) | Paradigm Shift | "Viewing productivity from the old paradigm point of "mass production" leads to concern for full management control rather than customer satisfaction. Lean management and manufacturing is a system and JIT is only one element of this system and is not effective and should not be viewed isolated from other elements of this system such as TPM, One Piece Flow, SMED, Poka-Yoke etc." |
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| └► seyi (Singapore) | Combine JIT with business continuity planning | "I think all value chains in production system are split into a part which makes-to-forecast and a part which could, by using JIT, become make-to-order. JIT is not a stand-alone philosophy; and its application should be combined with business continuity planning to help to alleviate some of the aforementioned problems. " | |
| └► Dr. Michael D. Kull (USA) | JIT metaphors | "I agree. Planning for contingencies and creating a system with some slack allows for flexibility and efficacy even if it means it may be less efficient. The organic model is a good one. I like the brain metaphor (Morgan, "Images of Organization") as it actually suggests massive redundancies that can be repurposed as the environment changes. Depends on the company/industry of course." | |
| └► Oluwaseyi Solomon (Singapore) | JIT metaphors book | "Is Morgan "images of organization" a book?" | |
| └► Prakash Rao (INDIA) | JIT is an efficiency improvement tool | "JIT is one of the lean tools. Made available when required. It is an efficiency improvement tool, benefit is no waiting, hence the cost is less. To satisfy customers, most suppliers are managing JIT by putting one godown near customer premises. They oversee the efficiency improvement actions in this way." | |
| └► Dr. R. Varadarajan (India) | Misunderstanding JIT | "JIT is not just about matching production and supply so that there is no waiting time, leading to inventory reduction. I would say it is about agility of the entities to respond to changes in the in the environment with which the supply chain has a symbiotic relationship. The agility is implicit and hence not easily assimilated. That is why many suppliers end up accumulating inventory to satisfy the manufactures demands for supply as and when required. If the entities in a supply chain can reengineer their working methodology to incorporate agility to respond quickly to changes all these would not look like a problem." | |
| └► Nako Stefanov (Bulgaria) | JIT is only one Element | "I fully agree with the opinion of Hassnali Rassouli from Iran that JIT is only one element within whole system, including TPM, etc. Today of course JIT must be the object of further improvement, especially integration with ICT. If such integration will take place it means a bright future for TPS - Toyota Production System or Total Production System. This last term I think is better to use because one feature of the system is all employees creative involvement by SGA and continuous improvement as one of the basic principles." | |
| └► A.K.Bhargava (India) | JIT is relevent | "JIT if used properly is the most effective tool in present downturn of the economy. Only what required is to use it judiciously" | |
| └► Jason Schlott (USA) | Misunderstanding JIT | "I have to agree with most of the respondents on this matter. JIT should not be utilized as a singled out process. The methodology should be used in conjunction with several other processes so that a business can minimize loss. There are several outliers that may not be a good fit for JIT; however, there are processes within the business that might be suitable for JIT and thus, minimize loss. The technology field is a perfect example for JIT. With technology changing so rapidly, it would be to no ones advantage to stock pile inventory." | |
| └► Samuel Nduati Mbugua (Kenya) | Limitation of JIT: Not for Developing Countries | "JIT is a good and powerful tool in the value chain management since the efficient use of resources contributes towards the management of costs. Nevertheless, as a management tool, it can only be used by organisations with highly developed management systems and which are using advanced technology making it of limited use to organisations in the developing countries." | |
| └► Mayra Martinez (Ecuador) | Disadvantages of using JIT | "According to some of the above opinions JIT depends on exogenous factors which cannot be controlled. However nowadays JIT is one of the best tools used to manage stock, inventories, and the manufacturing process, but this method depends too much on time and if there are small failures, the entire system breaks and this is a great disadvantage." | |
| └► Bruno (Peru) | Disadvantages of JIT | "JIT is directed to minimize inventory cost but JIT must consider two parameters: risk exposure and cost/value. This means that not all materials must be included in JIT policies because there are strategic materials with high risk exposure and high value, others which are critical with high risk exposure and low value, or tactics materials with low value and low risk exposure. This is important to know because JIT entails to assure supply chain as a whole this means from supplier of supplier in that way successively.." |
| └► kambam vedantan (India) | JIT in Retailing and Manufacturing | "The JIT approach is applicable in retailing as much as manufacturing. It's basically about managing inventories to correlate with demand & supply of products. In my opinion JIT is now more relevant than before, since companies are facing a resource crunch. It helps them to plan & organize funds so that both the manufacturer & supplier will benefit." | |
| └► Peer Gelser (UAE) | JIT Conditions | "Re.1: Actually it doesn't depend on the product, but on the logistics build up and planning in an organization - including well defined marketing and sales objectives. Re.2: It demands formal and well planned - contractual - relationships. Re.3: Buyer can be in the other part of the world provided objectives, planning and deviation reporting take place. Re.5: If you mean working by objectives - yes. Re.6: No - the Supplier has to work by the principles in TQM - or be a Lean organization, living up to the KPI's, which are incorporated in the lead time from supplier to "our" organization. Re.7: Too much of "warm air" - collaboration fixed in agreements, where the organizations know its ones TQM principles and KPI's. The JIT definition is a misunderstanding." |
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| └► Greg (USA) | Make sure you have a backup plan | "I agree, it works very well when you have established guidelines, accountability and...A GOOD BACK UP PLAN during those critical moments when your supplier can't deliver just in time! It is very important to create a timely process when "delivery demands" are required." | |
| └► Manikandan (India) | Retailing - non applicability of JIT | "With due respect for the response of other members, I would like to add my view on JIT in retail industry. One of the function of Retailing is the "Offer" of Various items for choice to the customers. We can not keep a catalog of products in a retail store and based on the customer response the order may be executed. But it is just possible in Direct Marketing especially in online marketing where the purchase can be made for the order like in the case of DELL." | |
| └► Makarand (India) | JIT | "JIT works best when supplier's capacity is mostly used for the customer and so supplier has a very high dependence on the customer. This must always be understood" |
