Just In Time (JIT) manufacturing depicts the procedure whereby organizations just gain and produce items as an when required. This procedure is contradictory to conventional thought that centres around carrying a lot of product inventory and merchandise on hand to fulfil orders and create products. While the conventional methodology of storing up a large inventory and keeping the parts or stock items available to dispatch orders sounds practical, the fact of the matter is the process of holding noteworthy inventories in house consumes a lot of valuable resources that could be utilized somewhere else within the organization.
JIT manufacturing is certainly not a new concept. The JIT principle has really been around for more than one hundred years. The idea centres around the production or acquisition of simply enough units to fulfil current needs. The process was first introduced by Henry Ford around 1923. Mr Ford recognized the huge inefficiencies present when rail cars loaded with materials or components were sitting inactive. He comprehended those assets at rest represented lost income. JIT, as a procedure, didn’t generally come into sharp concentration until its adoption by the Toyota Motor Company. The Toyota organization has flourished with the implementation of this procedure to direct its product manufacturing and development.
Like lean manufacturing, JIT is intended to satisfy demand rather than create a surplus in expecting a future need. Its basic role is to decrease the waste that originates from overproduction, waiting and surplus stock.
The following are the wastes in a bit more detail:
Overproduction is manufacturing items ahead of time off or more than demand. It’s viewed as the most severe of the wastes by proponents of just-in-time manufacturing since it wastes time, money, and space, at the same time masking the other issues within an organization’s processes.
Waiting to start one process until another completion is incapable and a colossal waste of time. The flow of all operations ought to be productive and continuous. A few estimates guarantee that in excess 90% of a product’s time in manufacturing is spent pausing!
Excessive inventory typically implies that an organization has ordered more than the market demands or the demand falls drastically after the inventory is requested. In any case, it hurts business since it occupies space and should be managed. Companies often rid themselves of excess inventory by selling it at a decreased cost or tossing it out, both of which can bring down profits altogether.
Just-in-time signifies a major change in direction
In the past, manufacturers carried bigger inventories of stock and raw materials just in the event that there was an increased interest for their product. As anyone might expect, that philosophy is frequently called just-in-case (JIC) manufacturing.
Organizations alluded to this additional inventory as “safety stock,” and it constrained them to deal with this excess inventory and absorb a dent in
Ordering inventory as required means a business works with low inventory levels consistently and doesn’t hold safety stock. The just-in-time manufacturing technique lowers or kills their costs to carry overabundance inventory, and it diminishes waste. In any case, JIT requires manufacturers to do precise forecasting for the need for their products.
The how, when, and why of just-in-time
Just-in-time manufacturing started vigorously after World War II. Cash-strapped Japanese manufacturers started embracing the system since they couldn’t finance the enormous inventory production techniques that developed countries were utilizing. They likewise needed natural resources and accessible employees to take on large-batch inventory production.
Accordingly, these manufacturers assembled smaller plants and immediately turned small amounts of raw materials into small batches of items or segments. These smaller quantities permitted the manufacturers to create maintainable levels of working capital while limiting their financial risk.
While the original just-in-time concept is credited to Toyota, some contend that Japan’s shipyards effectively developed and executed the approach first. Regardless of which of these was the originator, the concept was born from Japan’s post-war lack of room for huge factories and inventory, absence of cash, and their lack of abundant natural resources.
News of the just-in-time manufacturing technique spared the United States around 1977, and by 1980 the vast majority of the developed nations had implemented some variant of it.
JIT in practice
Just-in-time manufacturing looks to reduce non-essential expenses and improve an association’s return on investment (ROI). Be that as it may, JIT is anything but a magical solution. It requires specific processes, structure, and, most of all, discipline. What’s more, it isn’t limited to controlling stock levels.
The following are some of the different components of a complete JIT system:
- Improving quality by removing defective work
- Staying organized with brilliant methods of housekeeping
- Smaller lot sizes
- Reduced set-up time and adaptable way to deal with changeovers
- Uniform workload throughout the plant
- Cross-trained specialists that have many different skill sets
- Streamlined movement of materials
- Designing components and parts to making handling less comple
- Visual tools to improve by and large communication
- Cellular manufacturing
- Pull systems that permit workers to pull in tasks as they are prepared
- Kanban system that matches stock to demand and arrives at more elevated levels of quality and output
What can businesses expect after adopting just-in-time?
At the point when organizations put the best possible time and effort into implementing a just-in-time manufacturing system, organizations can hope to see a general effect on their efficiency, operating costs, and risk management. In the first place, it permits the business to decrease the stock they carry on hand. This measure furnishes the organization with a more noteworthy amount of operating capital available to reinvest in new items or to support balance sheets. Second, it powers the companies that utilize this methodology to execute streamlined processes. At the point when a company is utilizing JIT, they don’t have a lot of parts in stock for production. This powers them to guarantee they have stable, all-around supply chain management systems. Third, it supports the organizations utilizing JIT to collaborate with different firms that understand the JIT process model and that can suit the on-demand nature of a JIT supply chain scenario.
The following are a few advantages that manufacturers worldwide are experiencing:
- Lower labour expenses
- Less space expected to work
- Drastically decreased inventory levels
- Improvements in quality
- Reduction in work in process (WIP)
- Fewer standard hours
- Less number of shipments
- Improvement in item quality
- Reduction in throughput times
Following are the drawbacks of Adopting Just-In-Time Manufacturing Systems
- Just-in-time manufacturing gives zero tolerance for mistakes, as it makes re-working troublesome in practice, as stock is kept to an absolute minimum.
- There is a high dependence on suppliers, whose performance is commonly outside the domain of the manufacturer.
- Due to there being no support for delays, production downtime and line idling can happen which would bear a hindering impact on finances and on the harmony of the production process.
- The company would not have the option to meet an unexpected increase in orders because there are no excess finished goods.
- Transaction expenses would be generally high as frequent transactions would be made.
- Just-in-time manufacturing may have certain detrimental consequences on the environment because of the continuous deliveries that would bring about increased utilization of transportation, which thus would consume more fossil fuels.
The implementation of a JIT based manufacturing system powers organizations to assess how they work together. Broken processes can easily hide in systems that are over-weighed down with surplus stock. Notwithstanding, as organizations start to lean their process flow and diagram and comprehend their organization’s business processes these messed up areas come rapidly to light. Process improvement programs, for example, Lean Six Sigma and JIT will expose and help to address broken, antiquated processes that are as yet being utilized from an era when inefficiency and excess were tolerated. Through the successful implementation of JIT manufacturing processes, when joined by powerful supply chain management utilizing available technology, it is feasible for businesses to not just increase the proficiency with which they produce a product, yet in addition, increase the money saved within an organization while doing so. JIT processes are not a silver shot to take care of all of a company’s problems, however, they give a strong foundation upon which to start implementing continuous procedure improvement within an organization.
Are there risks involved with just-in-time manufacturing?
Generally, organizations that utilize just-in-time manufacturing practices will see diminished cycle times, reduced operating costs, and faster times to market. In any case, there are risks, particularly for smaller companies. One supplier that experiences a breakdown and can’t ship the materials that an organization needs can shut down or disrupt the entire production process.
Likewise, a customer’s orders for products could surpass the organization’s estimated expectations, which could postpone the shipment of completed goods to several customers.
To have the most obvious opportunity with just-in-time, organizations must discover suppliers that are either located nearby or can supply materials rapidly and with minimal advanced notice. It’s additionally significant that these suppliers waive any minimum order requirements that could damage smaller businesses, which generally purchase fewer materials.
Following are the things to keep in mind when implementing a Just-In-Time Manufacturing System
- Just-in-time manufacturing can’t be adopted overnight. It requires responsibility in terms of time and adjustments to corporate culture would be needed, as it is obviously unique to traditional production processes.
- Adequate resources ought to be allocated, in order to obtain technologically advanced software that is typically required if a just-in-time system is to be a success.
- Building a trusting relationship with popular and time-tested suppliers will limit unexpected delays in the receipt of inventory.
- Management purchase and support at all levels of the firm are needed; if a just-in-time manufacturing system is to be effectively adopted.
- The design flow process should be redesigned and layouts should be re-formatted, in order to incorporate just-in-time manufacturing.
- Reduction in lead times and frequent deliveries ought to be joined.
- Set-up times ought to be decreased wherever possible.
- Workstation capacity ought to be balanced whenever possible.
- Preventive maintenance ought to be carried out, in order to minimize machine breakdowns.
- Lot sizes should be minimized.
- Quality enhancement programs ought to be adopted, so absolute quality control practices can be embraced.
- Motion waste ought to be limited, so the incorporation of conveyor belts may end up being a smart idea when implementing a just-in-time manufacturing system.
Does just-in-time manufacturing work with an ERP system?
The short answer is “yes” since most manufacturers have defeated any inherent conflicts between just-in-time manufacturing systems and enterprise resource planning (ERP) have fit the two systems effectively. As mentioned, JIT requires manufacturers to be exceptionally accurate in their forecasts for the demand for their products. A quality ERP system is intended to do only that.
Talk to an experienced ERP distributor to discover how your business can enjoy the advantages of both.
Organize your manufacturing planning and data effortlessly and accurately!