History of Just In Time (JIT):
Just In Time, called TOYOTA Manufacturing Production System, is part of the Lean Manufacturing Production System. There is a long story before becoming the Just-In-Time that we know today.
Eli Whitney first initiated the Just In Time concept in 1799, who had a large contract with the U.S. Army at the lowest cost, to Frederick W. Taylor, who studied time manufacturing and the standard of manufacturing in the late 1890s.
In the 1910s, Henry Ford introduced the new Model T automobile system in The Ford System or Just In Time. Henry Ford is said by many as the one who first implemented the Just-In-time System.
Then, not remember the year, Toyota and Ford were first incorporated by Taichi Ohno. Then Just-In-time System was first introduced in the Toyota System Production System.
The objective of Just In Time (JIT):
Just In Time is the manufacturing production system and its main objectives are listed below:
- No inventories are stored: so one of the just-in-time objectives is to reduce or eliminate the storage of inventories. In the old manufacturing production system, the raw material is purchased, products or goods are produced, and stored. This concept costs a lot of money to store not only raw materials but also store finished goods. Also, the production process is quite slow as the company might not seek a new way to improve the process. Therefore, JIT tries to overcome this problem. The productions are processed only if there are orders from customers.
- No material is purchased: In implementing the JIT, the material will not purchase if there are no productions. Unlike the old system, the raw material is purchased due to production forecasting demand and production. The old system normally has low networking with suppliers, and most of the raw materials required during the years are purchased in advance and spend a lot of money and space on storing the raw material and taking care of them. Just In Time System is trying to overcome this by ensuring a good relationship with the supplier and the raw materials are purchased only if there is production. However, this meets this objective. The company that implements Just In time needs to build a perfect relationship with its suppliers or, in order words, suppliers could access the company system to understand the demand. Otherwise, suppliers might be unable to supply the raw material on time and as required. This is the warning point for the company that wishes to implement this system.
- Improve the Production System: Another main objective of Just In Time Production systems is to help the company improve the production process. We will look in detail at how Just In Time could help in the following.
Definition of Just In Time (JIT):
Now let we go to the quick definition of Just In Time,
Just In Time is part of the Lean Manufacturing System that tries to maximize the efficiency of the Manufacturing Process, Minimize the waste of Inventories, and reduce the Cost of Storing.
Just In Time Manufacturing System requires a deep understanding of the customer’s demand, a Perfect Purchasing and Procurement System, and an Effective Production System.
Just In Time is the concept, and it is not improving the company directly, yet, it influences another process to improve the company.
We will talk later in this article,
Just In Time Production:
So what is the Just In Time Production?
The concept of Just In Time Production is that there is no production if there is no purchase order. Just In Time Production requires the perfection of a customer’s management system to lead the production department to get ordering data as quickly as possible. The customer order is the driver of production.
Most companies fail to implement and miss understanding this. Why? Because they understand that the Just-In-Time System is the method of forecasting how much product is required to produce due to current demand using the Just-In-Time formula. This doesn’t seem right.
They first have to make sure that the production department can assess the customer’s orders, and this data link to the purchasing department to make the quick order of material. We will talk later about the concept of Just In Time in Purchasing.
In the production process itself, the production department has to produce the product at the standard requirements. The waste is minimized by introducing a standardized system and ongoing study of the production process.
The production runs once the demand is the need. Still, after finished goods are done, the customer’s service or selling department could access that information and contact the customers immediately.
In this regard, the company needs to make a selling system that could link and access the production data.
Just In Time Purchasing
Now we move to JIT in Purchasing,
What is it all about?
JIT in Purchasing is the concept that tries to ensure that no raw materials are purchased once there is no production. It is hard.
If the company does not have the perfect system that links the production and customer service departments, this perfect purchasing system could not be implemented.
The important point of implementing Just In Time Purchasing is making the perfect relationship with suppliers.
Why? Because in the Just In Time Purchasing concept, your company does not have to store the raw materials. You only need the material when there are productions resulting from customers’ orders.
But, what you need to do for this concept,
Well, there are many things you need to do to implement the Just In Time Purchasing, but there are the necessary things,
- Let the Purchasing Department know and access the production system, estimating the required material and amounts.
- Access the supplier’s credit and make the perfect relationship with them.
- Try to seek an additional source of raw material. If one supplier is dying, then you could have another one instate.
- If possible, let your customers know about the production departments so they can be ready for you.
- Make sure that there is no disruption of your company’s production because of poor suppliers relationship.