Understanding The Just In Time (JIT) Method: Advantages And Disadvantages

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What Does Just in Time (JIT) Mean?

A system or a Just In Time (JIT) method is a management strategy that harmonizes the raw material orders from suppliers directly according to the production schedule. The company implements this Just in time inventory strategy to increase efficiency and reduce excess goods by accepting goods simply because it needs it for the production process. This Just in time method requires manufacturers to estimate requests correctly and accurately.

The Just In Time inventory system has a fairly contrasting side to the strategy in some cases, where the manufacturer has enough supplies to absorb the maximum market demand.

When we learn, even more, the Just-in-time (JIT) inventory system is a management strategy that minimizes inventory and improves efficiency. The system was originally introduced as the production system Toyota (TPS) because the car manufacturer Toyota was the first company to adopt the system in the 1970s.

The Kanban method is a scheduling system that is often used in conjunction with the JIT system to avoid excess capacity of work in the process (WIP). The success of the production process with the JIT method relies heavily on stable production, high-quality workmanship, no machine damage, and reliable supplier.

How The Just-In-Time (JIT) Method Works

One concrete example of implementing a JIT inventory system is a car manufacturer that operates with a low inventory level but relies heavily on the supply chain to provide the necessary parts to assemble the car, at the time of need. Consequently, manufacturers give orders to the assembly parts of the car, only after the order is received.

For the JIT method to succeed, the company must have stable production, high-quality craftsmanship, disruption-free plant machine, and reliable supplier.

JIT systems and methods can cut inventory costs because manufacturers do not have to pay the cost of storing goods. Manufacturers are also not left with unwanted inventory if the order is suddenly canceled or unfulfilled.

Benefit Of JIT System

The JIT inventory system has several advantages compared to existing conventional models. Production goes short, which means that manufacturers can quickly move from one product to another. Besides, this method can reduce costs by minimizing warehouse needs to store goods. Companies also spend a small fee to buy raw materials because they buy only enough resources to make the product ordered and nothing more than that.

Lack Of JIT System

The disadvantage of the JIT system is the potential disruption in the supply chain. If the supplier of raw materials has the details and can not deliver the goods at the right time, then it will impact the overall production process.

Kanban is a Japanese scheduling system that is often used in conjunction with Lean Manufacturing and JIT. Therefore, an industrial engineer at the Toyota Plant developed Kanban to increase manufacturing efficiency. The system highlights problem areas by measuring leads and cycle times throughout the entire production process, which helps identify upper limits for job-in-process inventory, to avoid overcapacity.

Although very well known for its JIT inventory system, Toyota Motor Corporation only ordered goods when it received a new car order. Although the company had implemented this method in the 1970s, it took 15 years to run the JIT system well and perfectly as it is now.

That's a bit of an article on understanding the Just In Time (JIT) Method: Advantages And Disadvantages. Hopefully, provide benefits to you and can add insight to your knowledge.

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