just in time (jit) manufacturing and msk

8/7/2019 Just in Time (JIT) Manufacturing and msk

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JUST IN TIME (JIT)

M ANUFACTURING AND

INVENTORY CONTROL S YSTEM

Maryam Shoieb Khan



Traditionally manufacturers have forecasted demand fortheir products into the future and then have attempted tosmooth out production to meet that forecasted demand.They have also attempted to keep everyone as busy aspossible producing output so as to maximize "efficiency"

and (hopefully) reduce costs.

Unfortunately, this approach has a number of majordrawbacks including large inventories, long productiontimes, high defect rates, production obsolescence, inabilityto meet delivery schedules, and (ironically) high costs.

Non of this is obvious-if it were, companies would long agohave abandoned this approach.

Managers at Toyota are credited with the insight that anentirely new approach, called just in time (JIT) was needed.



WHA T IS JIT?

Just In Time (JIT) is a production and inventory control system

in which materials are purchased and units are produced only as

needed to meet actual customer demand.

When Companies use Just in Time (JIT) manufacturing and

inventory control system, they purchase materials and produce

units only as needed to meet actual customers demand. In just in

time manufacturing system inventories are reduced to the

minimum and in some cases are zero.

JIT approach can be used in both manufacturing and

merchandising companies. It has the most profound effects,

however, on the operations of manufacturing companies whichmaintain three class of inventories-raw material, Work in process,

and finished goods.



Traditionally, manufacturing companies have maintained large

amounts of all three types of inventories to act as buffers so that

operations can proceed smoothly even if there are unanticipated

disruptions.

Raw materials inventories provide insurance in case suppliers arelate with deliveries.Work in process inventories are maintained

in case a work station is unable to operate due to a breakdown or

other reason. Finished goods inventories are maintained to

accommodate unanticipated fluctuations in demand.



JUST-IN-TIME CONCEPT:

Under ideal conditions a company operating atJIT manufacturing system would purchase onlyenough materials each day to meet that daysneeds.

Moreover, the company would have no goods stillin process at the end of the day, and all goodscompleted during the day would have beenshipped immediately to customers.

A s this sequence suggests, "just-in-time" meansthat raw materials are received just in time to gointo production, manufacturing parts arecompleted just in time to be assembled intoproducts, and products are completed just in timeto be shipped to customers.



A lthough few companies have been able to reach

this ideal, many companies have been able to

reduce inventories only to a fraction of their

previous level. The result has been a substantial reduction in

ordering and warehousing costs, and much more

efficient and effective operations.



A t the final assembly stage a signal is sent to the

preceding work station as to the exact amount of

parts and materials that would be needed over

the next few hours to assemble products to fillcustomer orders, and only that amount of

materials and parts is provided.

The same signal is sent back to each preceding

workstation so a smooth flow of parts and

materials is maintained with no appreciable

inventory buildup at any point.



The pull approach described above can

be contrasted to the push approach used

in conventional manufacturing system.

In conventional system, when aworkstation completes its work, the

partially completed goods are pushed

forward to the next work station

regardless of whether that workstation is

ready to receive them.



A n other characteristics of conventional

manufacturing system is an emphasize on

"keeping every one busy" as an end on itself. This

inevitably leads to excess inventories particularly

work in process inventories.



BENEFITS | A DVANTAGES OF JUST IN TIME

M ANUFACTURING S YSTEM:

The main benefits of just in time

manufacturing system are the following:

Funds that were tied up in inventories can be

used elsewhere. A reas previously used, to store inventories can be

used for other more productive uses.

Throughput time is reduced, resulting in greater

potential output and quicker response tocustomers.

Defect rates are reduced, resulting in less waste

and greater customer satisfaction.



REAL BUSINESS E XAMPLES

PCs Just In Time Management:

Del Computer Corporation has finally tuned its

Just-in-Time system so that an order for acustomized personal computer that comes in over

the internet at 9 A M. can be on a delivery truck

to the customer by 9 P.M.

In addition, Dell's low cost production system

allows it to under price its rivals by 10% to 15%.



DISADVANTAGES OF JUST IN TIME

M ANUFACTURING S YSTEM:

JIT manufacturing also opens businesses to a

number of risks, notably those associated with

your supply chain.

With no stocks to fall back on, a minordisruption in supplies to your business from just

one supplier could force production to cease at

very short notice.



REAL BUSINESS E XAMPLE:

Toyota the Developer of JIT System

Just-in-time manufacturing system has many

advantages, but they are vulnerable to

unexpected disruptions in supply.

A production line can quickly come to a halt if

essential parts are unavailable. Toyota, the

developer of JIT, found this out the hard way.



One Saturday, a fire at A isin seiki Company's

plant in A ichi Prefecture stopped the delivery of

all break parts to Toyota.

By Tuesday, Toyota had to close down all of itsJapanese assembly line. By the time the supply

of break parts had been restored, Toyota had lost

an estimated $15 billion in sales.



List of Companies that use just in time (JIT)

Harley Davidson

Toyota Motor Company

General Motors

Ford Motor Company

Manufacturing Magic

Hawthorne Management Consulting

Strategy Manufacturing Inc.



Thank you

just in time (jit) manufacturing and msk

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