Just in time production (JIT)

Just in time is a ‘pull’ system of production, so actual orders provide a signal for when a product should be manufactured. Demand-pull enables a firm to produce only what is required, in the correct quantity and at the correct time.
This means that stock levels of raw materials, components, work in progress and finished goods can be kept to a minimum. This requires a carefully planned scheduling and flow of resources through the production process. Modern manufacturing firms use sophisticated production scheduling software to plan production for each period of time, which includes ordering the correct stock. Information is exchanged with suppliers and customers through EDI (Electronic Data Interchange) to help ensure that every detail is correct.
Supplies are delivered right to the production line only when they are needed. For example, a car manufacturing plant might receive exactly the right number and type of tyres for one day’s production, and the supplier would be expected to deliver them to the correct loading bay on the production line within a very narrow time slot.
Advantages of JIT 
1. Lower stock holding means a reduction in storage space which saves rent and insurance costs 
2. As stock is only obtained when it is needed, less working capital is tied up in stock 
3. There is less likelihood of stock perishing, becoming obsolete or out of date 
4. Avoids the build-up of unsold finished product that can occur with sudden changes in demand 
5. Less time is spent on checking and re-working the product of others as the emphasis is on getting the work right first time
Disadvantages of JIT 
1. There is little room for mistakes as minimal stock is kept for re-working faulty product 
2. Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed 
3. There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders – however, JIT is a very responsive method of production 

Some Key Elements of JIT

1. Stabilize and level the MPS with uniform plant loading (heijunka in Japanese): create a uniform load on all work centers through constant daily production (establish freeze windows to prevent changes in the production plan for some period of time) and mixed model assembly (produce roughly the same mix of products each day, using a repeating sequence if several products are produced on the same line).  Meet demand fluctuations through end item inventory rather than through fluctuations in production level.  Use of a stable production schedule also permits the use of backflushing to manage inventory: an end item’s bill of materials is periodically exploded to calculate the usage quantities of the various components that were used to make the item, eliminating the need to collect detailed usage information on the shop floor. 
2. Reduce or eliminate setup times: aim for single digit setup times (less than 10 minutes) or “one touch” setup – this can be done through better planning, process redesign, and product redesign.  A good example of the potential for improved setup times can be found in auto racing, where a NASCAR pit crew can change all four tires and put gas in the tank in under 20 seconds.  (How long would it take you to change just one tire on your car?)  The pit crew’s efficiency is the result of a team effort using specialized equipment and a coordinated, well-rehearsed process.
3. Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical production of smaller lots; close cooperation with suppliers is necessary to achieve reductions in order lot sizes for purchased items, since this will require more frequent deliveries.
4. Reduce lead times (production and delivery): production lead times can be reduced by moving work stations closer together, applying group technology and cellular manufacturing concepts, reducing queue length (reducing the number of jobs waiting to be processed at a given machine), and improving the coordination and cooperation between successive processes; delivery lead times can be reduced through close cooperation with suppliers, possibly by inducing suppliers to locate closer to the factory.
5. Preventive maintenance: use machine and worker idle time to maintain equipment and prevent breakdowns.
6. Flexible work force: workers should be trained to operate several machines, to perform maintenance tasks, and to perform quality inspections.  In general, JIT requires teams of competent, empowered employees who have more responsibility for their own work.  The Toyota Production System concept of “respect for people” contributes to a good relationship between workers and management.
7. Require supplier quality assurance and implement a zero defects quality program: errors leading to defective items must be eliminated, since there are no buffers of excess parts.  A quality at the source (jidoka) program must be implemented to give workers the personal responsibility for the quality of the work they do, and the authority to stop production when something goes wrong.  Techniques such as “JIT lights” (to indicate line slowdowns or stoppages) and “tally boards” (to record and analyze causes of production stoppages and slowdowns to facilitate correcting them later) may be used.
8. Small lot (single unit) conveyance: use a control system such as a kanban (card) system (or other signaling system) to convey parts between work stations in small quantities (ideally, one unit at a time).  In its largest sense, JIT is not the same thing as a kanban system, and a kanban system is not required to implement JIT (some companies have instituted a JIT program along with a MRP system), although JIT is required to implement a kanban system and the two concepts are frequently equated with one another.