Just-in-time (JIT) is a management philosophy that strives to eliminate sources of manufacturing waste by producing the right part in the right place at the right time.  Waste results from any activity that adds cost without adding value, such as moving and storing.  JIT (also known as lean production or stockless production) should improve profits and return on investment by reducing inventory levels (increasing the inventory turnover rate), reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs (such as those associated with machine setup and equipment breakdown).  In a JIT system, underutilized (excess) capacity is used instead of buffer inventories to hedge against problems that may arise.

Key Elements of JIT (advantages):

• Continuous improvement.
  • Attacking fundamental problems – anything that does not add value to the product.
  • Devising systems to identify problems.
  • Striving for simplicity: simpler systems may be easier to understand, easier to manage and less likely to go wrong.
  • A product-oriented layout: produces less time spent moving of materials and parts.
  • Quality control at source: each worker is responsible for the quality of their own output.
  • Poka-yoke: foolproof’ tools, methods, jigs etc. prevent mistakes
  • Preventative maintenance, Total productive maintenance: ensuring machinery and equipment functions perfectly when it is required, and continually improving it.
• Eliminating waste. There are seven types of waste:
  • Waste from overproduction.
    • Waste of waiting time.
    • Transportation waste.
    • Processing waste.
    • Inventory waste.
    • Waste of motion.
    • Waste from product defects.
• Good housekeeping: workplace cleanliness and organization.
• Set-up time reduction: increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling – a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
• Leveled / mixed production: to smooth the flow of products through the factory.
• Kanbans : simple tools to `pull’ products and components through the process.
• Jidoka (Autonomation): providing machines with the autonomous capability to use judgment, so workers can do more useful things than standing watching them work.
• Andon (trouble lights): to signal problems to initiate corrective action.

Just in Time disadvantages:

• Expected stock out
• Stock out will lead to loss of customers
• Delays in delivery due to the disability to control on the distribution channels
• The disability to have economies of scale in purchasing due to high purchased units.

Just in Time in general is in general a successful strategy in order to minimize cost and increase profits. It was tested in Japan in the past and it proved its success. The basic issue in Just in Time is trying to keep inventory of goods as small as possible in order to decrease the carrying cost and produce upon customers’ demand exactly without keeping huge inventory of raw materials and finished goods and at the same time to avoid stock out which will result in the loss of customers.

Reference:

“Just-In-Time Production Systems: Replacing Complexity with Simplicity in Manufacturing Management”, Industrial Engineering, October 1984, pages 52-63; and Applications of Single-Card and Dual-Card Kanban, Interfaces, August 1983, pages 56-67.