Just in Time Inventory

Only available on StudyMode
  • Download(s) : 144
  • Published : October 16, 2010
Open Document
Text Preview
Just in Time Inventory System
Just in Time (JIT) manufacturing is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand (Steyn, 2010). The basic principle of JIT is that every component needed in the manufacturing system arrives just in time for it to be used. Stock holding facilities are not required with this system because the needed products arrive when needed. Automobile industries, like Toyota Motor Company, are well known for using JIT. Nevertheless, there are companies of various sizes that are currently using and switching to JIT manufacturing. This type of manufacturing may appear simple, however, employing it can be a very costly and difficult undertaking. Therefore, companies who make use of this inventory system must continuously seek ways to reduce waste and enhance value. Advantages

JIT manufacturing is an advantageous system. The many advantages offered by this system differ from company to company. Overall, JIT makes production operations more proficient, cost effective and customer receptive. Manufactures who utilize JIT receives components right before they are needed on the assembly line eliminating the cost and burden of housing and managing idle parts. This in turn helps prevent manufacturers from being stuck with inventory that may become obsolete. JIT can save companies a lot of money. Businesses are more responsive to their customers and have less capital tied up in raw materials and finished goods inventory. This allows the businesses to optimize their transportation and logistics operations. Companies who use JIT also have reduced throughput times, resulting in greater output and quicker response to customers. JIT manufacturing has also proven to have less defect rates that result in decreased waste and greater customer satisfaction. Disadvantages

Introducing JIT in an organization can be complicated and costly....
tracking img