Introduction
Just in Time (JIT) is an inventory policy that is based on the controlled exclusion of all waste and improving the return on investment. This approach aims at producing the right product at the right time while reducing costs that are drawn in the supply chain; these costs or rather wastes include faulty production strategies that need re-operation, unworthy materials movement, gaining excess supply or equipment breakdown costs. In the elimination of keeping the inventory, JIT ensures that supplies are only delivered when required. It is known that JIT evolved itself from the Toyota Production System also termed Kanban (Long, 2003, p. 53). JIT depicts itself in different ways; including a production strategy, a philosophy and a program, which are deemed to improve profits and investment returns as compared to the traditional inventory control.
Body
The traditional inventory control is normally seen as adding subsequent costs or waste to some extent, rather than improving the investment value. This is because some predefined steps are involved in the inventory control which does not take care of the wastes that are incurred in the supply chain; the supplies can be stored for a long time without proper marketing strategies for consumers’ awareness. In contrast, JIT is implemented to reduce the stocks; it eliminates the materials that do not pay for the issues in manufacturing, and then immediately increasing the returns on inventory by keeping fewer stocks. While a traditional inventory control applies a whole manufacturing process, the JIT is mainly involved in a recurring manufacturing method in which the same products and items are produced over short periods. This approach has been experienced in two automobile companies; Toyota and Ford as a lean initiative (Jacobs, 2006).
JIT is viewed as incorporating various elements. Long (2003) outlines that JIT as a program strategy – eliminates costs and makes more efficient application of company resources, as a philosophy – ensures that the right materials are acquired at the right time, and as a program – gets rid of non-value-added operations, while improving the quality and productivity, lowering the inventory and setting sustainable relationships with the channel members. Other key features are: 1. Reduce setup times – this can be realized through proper planning, product and process redesign. 2. Reduce lead times – the manufacturing lead times can be lowered by performing a collective production technique, in which resources are used in a group technology; the lead times for delivery can be reduced through proper cooperation with the suppliers and middlemen in a view to congest the supply chain. 3. Preventive maintenance – idle time for appliances and employees is used for maintenance. 4. Flexible workforce – employees should be trained to acquire expertise in machine operations and other core company duties. 5. Require quality assurance from the dealer – errors that lead to faulty materials must be done away with. Jacobs (2006) comments that a quality at the source (jidoka) project must be put in place to enable workers to become responsible in relation to their duties.
The key elements of the JIT strategy enable companies to realize several benefits; some of them are explained in the previous paragraphs. Firstly, this policy reduces setup times in the factory. Ensuring that setup time is more prolific enables the organization to be much efficient and focus on other activities that require improvement. Secondly, the movement of goods from the stores to the shelves is enhanced. A system that enables workers to be focused on particular processes will allow them to generate products faster without the fear of processing goods at once, hence simplifying the tasks at hand; inventory flows and management is simplified. Thirdly, JIT ensures that there is improved consistency of planning and integrity of work hours. Without the demand for a certain product, workers don’t have to manufacture the product; hence saving the payments for the work and making the employees focus on other activities within the warehouse. Fourthly, there is utilization of employee skills. Workers with multiple skills can be utilized in instances where the inventory system requires personnel to work on a more demanded product in case of shortages. Lastly, JIT enhances supplier relationships, making sure that supplies are consistent therefore keeping workers industrious and focusing on turnover. When the executive is alert on meeting the deadlines, the company will meet its goals and the anticipations of employees; promotion and pay rise.
Conclusion
In conclusion, companies should properly analyze their inventory control system before incorporating the JIT strategy. In implementing the JIT policy a company will be able to enhance its workforce capability, reduce set up times, maximize the flow of demanded goods and ensure that supplier relations are adhered to; JIT shifts the stock to the suppliers. In terms of logistics, JIT calls for integration of the parties involved in the supply chain, hence solving transportation issues.
References
Jacobs, R. A. (2006). Just-In-Time (JIT) Production. Web.
Long, C. D. (2003). International logistics: Global Supply Chain Management.Berlin: Springer.