Article on Just-In-Time (JIT) Management

Just-in-time or JIT means producing goods and services exactly when they are needed, like for example. A new company opens that is producing steering shaft for automobiles.  The company, under the JIT system, will set up the machines to produce the jobs in a row from those who collect the metals at one end, all of the way to those who ship the product at the other end of the factory.  The people at each station, as they receive the product, take the job order, perform their duties on the product, and then transfer the product out to the next station after their work is completed.  Along the way, the product is screened for infirmities, and if they exist, the line is stopped until the defect is repaired.  In the end, the shipping agent will receive the product and ship it to the customer.  All along the way, the production never began until the order came in and then the goods were produced from that point on out, and not sitting in inventory waiting on the already finished good.

L’Oreal, the world’s largest toiletries and cosmetics group, initiated was to reduce the set-up times on the line which produces hair colorant from 2.5 hours to only 8 minutes. These new change-over times mean that the company can now justify even prior to change in set-up times, batch sizes was 30,000 Units; now batches as small as 2000 to 3000 units can be produced cost effectively (Slack and Chambers, Harland and Harrison, and Johnston , 1998).

The underlying principle of JIT is one of continuous waste elimination and hence it is universally applicable. Obviously, the manner in which JIT principles are applied across different industries will vary. For example, in process industries, potential applications of JIT philosophy would include implementation vendor development and JIT purchasing. Furthermore the fundamental concept behind JIT manufacturing is getting the right product to the right place at the right time.  This is achieved by correctly timing the supply chain so that as soon as a batch is processed, there is a new batch waiting to be processed.  A steady flow of unfinished goods through the various production levels eliminates the need for extra materials to be kept in storage. In addition, JIT also eliminates waste associated with labor and time. JIT is key element in leading to lean production or lean system, which meant to turn higher productivity in an organization. Lean systems utilize the pull, push or combination of both method of workflow. The push method is applicable when the production of the item begins in advance of customer needs. In push system, the emphasis shifts to using the information about customers, suppliers and production to mange materials flows. Batches of raw materials are planned to arrive at a factory about when needed to make batches or parts and sub-assemblies. These assemblies are made and delivered to final assembly about when needed and finished products are assembled and shipped about when needed by customers.

“Catch up with America in three years, otherwise the automobile industry of Japan will not survive”. After 2nd world war, Toyota Motor Company’s Chief Engineer, Taiichi Ohno began to examine the American industry and found that American manufacturers made great use of economic order quantities, the concept of lot and batch, before switching to another job,  Ohno decided that waste that happened in America would have to be decreased if he were to develop a technique for Japan, as what he describe as “war on waste” so he proposed decreasing waste by making it were items only move through production when they are demanded, “Jidoka” which is the Japanese concept or quality program where inspection for problems would occur and stop the process until they were repaired, thereby reducing waste. Jidoka was a great system in order to prevent cost of quality by stopping at early stage of defects, and not only that, the system is also educates the entire employees from top to down in production line in identifying the cause and solutions. (Ettlie, 1990)

3M, manufacturing planners work with customer planners to develop strategies for each customer segment. Changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness to customers. (Lambert and Cooper, 2000). IBM uses continuous flow manufacture; Hewlett-Packard Company uses stockless production at one plant and repetitive manufacturing system at another, while many other companies use lean production. Synchronized material flow is still another term used. (Schonberger, 1998).  JIT system improves the quality of the responsibility of every worker and not just quality control inspectors, reduce scrap and rework, reduce cycle times, lower setup times, smoothen production flow, decrease inventory of raw materials, work-in-progress and finished goods, incur cost savings, force higher productivity, increase worker participation, attracts a more skilled workforce, makes organization and employees able and wiling to switch roles, reduces space requirements, and improves relationships with suppliers. Since its introduction in Japan, and later introduced in the United States.Operations-based JIT concepts were correlated with both the product and process focused quality initiatives, these two constructs interacted. Inventory-based JIT concepts also interacted with product focused quality initiatives, suggesting that JIT practices, implemented to manage inventory, also enhanced quality. Reducing lot sizes, setup times and the supplier base, buying from JIT suppliers, and engaging in preventive maintenance are all well-documented operations practices for improving quality levels Therefore, the managerial implication here is that manufacturing firms should not ignore JIT practices and concepts. Thus the strengths of JIT system is that it does reduce overproduction, time spent waiting, transportation and movement of products, processing time, inventory levels, and/or defects that are produced in a plant.  These processes thereby increase the profitability of an organization and make it leaner.

Improved transportation infrastructure is also reduces just-in-time (JIT) production costs.  JIT is a means of raising productivity and lowering costs for manufacturing.  It relies on tightly scheduled and frequent deliveries of supplies to reduce inventory needs and costs. The success of JIT relies on being able to deliver, on the part of the companies, an assured quality and quantity of goods without delay. The main thrust of JIT is a ‘Quick Response Strategy’ to a swiftly changing market through organizational flexibility. JIT thus advocates the organizational ability to deliver high quality products, respond rapidly to changes in demand and be more cost-competitive. Therefore, it leads to higher productivity in an organization. For example, Steve Millward is manufacturing director for the Rainford Group in Coventry is the supplier of mobile telecommunication base station structures to cellular companies in US, the company enjoys the rapid growth when steve increased his focus on JIT operations toward the lean system, he re-arrange the layout in the assembly areas so that the product flows along a defined assembly path, with the provision Kanban (Japanese version of JIT), boxes between each operating station. it means that one stage in the process will not progress a product until the next stage really does need it. This will effectively control the level of work-in-progress on the line, ensuring that the line will work at the pace of the slowest section. It will produce goods only when they are actually needed, also using leveled scheduled in order to keep the production rates of each model steady and to provide some predictability in the cells. This analysis required to design the operation for JIT control involves balancing the level of activities at each station, so as not to create any bottle-necks. In this direction Rainford Group can see clear benefits and opportunity to be productive. However, issues in JIT system can be its streamlines processes and reduces any risky last minute changes, which might be profitable.  It is clearly understood that risk and profitability are inversely proportional to each other, in that the less risk (which JIT virtually eliminates because of the lack of uncertainty and that element of surprise and change), the less return the organization can potentially receive.  It makes an organization less able to maneuver and change as it may be deemed profitable. What hampers successful JIT implementation is the lack of clarity and priority leading to confusion and wasteful expenditure of organizational energy. (Galloway and Azhashemi and Rowbotham, 2000)

References:

  • Ettlie, J, E. (1990), ‘Manufacturing Strategy’, Kluwer Academic Publishers
  • Galloway, L and Azhashemi, M and Rowbotham, F (2000), ‘Operations Management in Context’ 2nd edn , Butterworth Heinemann.
  • Schonberger, J (1998), ‘Operations Management’ 6th edn, Irwin.
  • Slack, N and Chambers, S and Harland, C and Harrison, A Johnston, R, (1998), ‘Operations Management: Financial times’ 2nd edn, Prentice Hall P-560.

Source: Scribd.com

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]
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