A JIT operation maintains only the required inventory in demand. Previous year's sales statistics dictate how much product to keep on hand, allowing the use of excess capital elsewhere. Just in time is a fully automated system that monitors inventory levels and places orders accordingly. This feature ensures a company sustains the right amount of product on hand.
Information about just-in-time management includes some drawbacks. Generally, single suppliers participate in JIT operations. Therefore, an interruption in supply, costs your company profits and customer goodwill. In addition, company expenses increase when suppliers pass shortage costs on to their clients. Such expenses negate the savings JIT scheduling provides. Avoid these expenses by manufacturing in-house, owning the manufacturer or investigating your supplier's integrity and service record.
Implementing a JIT system provides your company with the following benefits:
- Just-in-time manufacturing reduces inventory, storage, depreciation and shipping costs.
- Product quality increases with just-in-time materials. JIT planning eliminates the burden of products becoming obsolete while sitting on the shelf.
- A JIT solution improves efficiency. It redistributes space, processes and funds previously designated for inventory.
- JIT management creates a better customer experience. With this system in place, customers receive the highest quality products when they need it.
Action Steps
The best contacts and resources to help you get it done
Determine your software and process converting partners for implementing JIT management
Converting your existing inventory process to just-in-time management is not a do-it-yourself project. JIT uses a few software systems to maintain inventory counts. Companies often use Kanban, E-Kanban or material requirements planning (MRP). A Kanban or "pull" production control system manually controls the movement of materials between work centers using cards for requesting small products. More technologically designed, E-Kanban is an electronic version of Kanban. E-Kanban eliminates the manual pitfalls of its predecessor and determines inventory replenishment times.
I recommend: JIT articles rank Kanban scheduling systems as the most flexible and cost efficient for many types of inventory-based companies. Download
Strategos' E-Kanban simulation game to get a feel for how it works.
Lean Depot provides E-Kanban demonstrations and consultation from concept development to implementation. Lean Depot assists you in converting your operations area and your operations staff for the smoothest inventory management transition.
Incorporate trustworthy product resources for successful just-in-time management
Dependable product resources build the foundation of any JIT process. Find JIT participating suppliers to pull the operation together. Also, select a product organization system to monitor inventory.
I recommend: No matter what type of business you operate,
Mniguide provides you with a searchable database of suppliers and wholesalers. For Kanban users, organize and monitor your inventory with JIT tracking materials from
Magnatag. Their products help you keep accurate counts at a glance.
Get information about just-in-time management
Before you adopt this style of inventory management, get the scoop from JIT articles and blogs.
I recommend: LeanBlog, a blog about "lean" business practice, has positive posts about JIT management. The academic paper "
Just-in-Time Under Fire: The Five Major Constraints Upon JIT Practices," published in The Journal of American Academy of Business, Cambridge in 2006 by Dr. Polito and Dr. Watson, advocates against its use.
Tips & Tactics
Helpful advice for making the most of this Guide
- Just-in-time manufacturing provides more benefits than obstacles for maintaining your inventory business. It reduces waste, optimizes efficiency and cuts costs related to storing, managing and shipping inventory.
- Having a surplus of products is not the key to greater customer satisfaction. JIT allows your company to provide the most innovative products to your customers when they need them.
The official source of Just-In-Time (JIT) is the Just-In-Time (JIT) page at Business.com
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