Just-In-Time (JIT) Manufacturing, also known as lean manufacturing or the Toyota Production System, is a methodology aimed primarily at reducing times within the production system as well as response times from suppliers and to customers.
The JIT manufacturing system encompasses a range of activities including:
- Production: Operations are designed to be carried out swiftly and without any waste. Production only starts when there is actual demand for the product, not in anticipation of demand. This eliminates the need for excessive inventory of raw materials or finished goods, thus reducing the cost of inventory holding.
- Supplier relations: A strong relationship is maintained with the suppliers to ensure the prompt delivery of materials, thereby eliminating delays and keeping the production process efficient.
- Quality control: High-quality standards are maintained to avoid defects and rework, which can cause delays and increase costs. JIT manufacturing often includes practices such as Total Quality Management (TQM).
- Continuous improvement: JIT manufacturing involves a constant quest for perfection through continuous improvement. This concept is often described by the Japanese term “kaizen”.
One of the main benefits of JIT manufacturing is that it can significantly reduce waste and cost, making an organization more efficient and competitive. However, the system’s success largely depends on the accurate forecasting of demand, and a reliable supply of inventory, and any disruption to this can be a significant risk.
The principles of JIT can be applied beyond manufacturing, into fields like service industries, software development (Just-In-Time Compilation) and even in life (personal productivity and organization).
Example of Just-In-Time Manufacturing
A real-world example of Just-In-Time (JIT) manufacturing: Toyota Motor Corporation.
The JIT concept actually originated from Toyota’s production system. The company implemented this strategy to manage their operations more efficiently, reduce costs, and improve quality.
Before the implementation of JIT, companies like Toyota held large inventories of parts and materials to ensure that production could continue even if there were supply disruptions. These large inventories required significant storage space and tied up a lot of capital.
However, Toyota realized that by synchronizing their manufacturing processes with their suppliers, they could reduce the amount of inventory they had to keep on hand. Here’s how it worked:
- When Toyota is about to run out of a particular part (say, a car seat), they send a signal (known as a “kanban”) to their seat supplier.
- Upon receiving this signal, the seat supplier would then deliver a new batch of car seats to Toyota’s assembly plant just in time to be installed in the next vehicles on the production line.
- The new seats would arrive just as the last ones were being used up, thus eliminating the need to store extra seats at the Toyota plant.
This way, Toyota managed to minimize storage costs and keep only the necessary inventory in the factory, freeing up capital for other purposes. This also led to a smoother, more streamlined operation with less waste.
However, the success of JIT requires highly reliable suppliers. If the seat supplier is unable to deliver the new batch of seats on time, it could halt the entire production line. That’s why Toyota invests a lot of time and effort in establishing strong relationships with its suppliers and ensuring that they’re as committed to JIT principles as Toyota is.
Overall, the JIT approach has made Toyota one of the most efficient car manufacturers in the world, and its principles have been adopted by many other companies across various industries.