Just-in-time manufacturing (JIT) also known as the Toyota Production
System is a methodology aimed at reducing flow times within
production systems as well as response times from suppliers and to
customers.
It originated in Japan in the 1960s and 1970s, but the wise use of
the term JIT faded in the 1990s as the new term “lean
manufacturing” was established as a more recent name for JIT.
Benefits:
- Lower warehouse costs. Since less
space is needed, this reduces the amount of storage an organisation
needs to buy or rent.
- Less amount of inventory
obsolescence, when companies use the traditional method of inventory
they can end up with pallets of unsold items that simply go to waste
- Defect rates are reduced resulting
in less waste and greater customer satisfaction.
Risks:
- You become reliant on your suppliers. Suppliers need to be able to
supply materials quickly with very limited advance notice and any
unexpected even can derive in long term out of stocks.
- Employees are at risk of precarious work as employers seek to
easily adjust their workforce in response to supply and demand
conditions by increasing the amount of contracting and temporary
work.
- By not carrying much of stock, the
risk of out of stocks is higher making imperative to have the correct
procedures in place to ensure stock can become readily available.
- More and better planning is
required to ensure stock is available at all times
If you want to learn more, check out the video below that explains in detail what JIT is and all the elements around this philosophy.
Couldn´t finish this post without some music. Happy week!
