Just in Time

Topics: Inventory, Supply chain management, Holding cost Pages: 9 (2171 words) Published: May 3, 2014
Table of Contents

Introduction
Just-in-time is a new system created by Taiichi Ohno in Japan in the early 1970s at a Toyota car assembly plant. It was created to reduce cost and eliminate inventory. Basically the idea of JIT is to produce necessary items at the necessary time in the necessary quantity needed. It is a management philosophy and not a technique, which is associated with the management process and not the end-result. In other words, the idea is to supply materials only when needed for production to eliminate storage costs and waste. This report is to understand the processes in JIT as well as to identify the reason behind employing JIT system within a company and its usage to eliminate cost and improve efficiency. This report also identifies the advantages and disadvantages of implementation JIT to address the problem faced by most manufacturing companies. Literature Review

The case study that we would like to review was a study on the JIT system in a Chinese automotive industry – Company X. (Hou, Hing Kai, & Xiaojun, 2011). In this study, the research concluded that the system is successful and led to many advantages for the company. This research addresses five main concerns in implementation JIT and that these key research themes are important in making the system a flawless one. First theme was on information system. Good information system supports JIT by using the Internet to connect and have clear communication between the suppliers, company and customers. There is a clearer picture and supply and resources can be delivered smoothly. The second research theme is production planning. In Company X, a three-lamp signal of the Kanban system was implemented to facilitate production planning and control. This signals help workers understand the stages or production that is going on, as well as helping them identify if there are any errors faced during production. This facilitates damage control in order to facilitate smooth production. The third research theme is Inventory Management. This study was to identify if it is even possible to attain zero inventory in an automobile industry. This industry requires large supplies if raw materials that will be going through various processes and production. Realistically, this study concluded that it is difficult to achieve zero inventories in some industries, including this, due to the fact that some would fall under the category called ‘safe inventory’. The fourth research theme is quality management. In order to implement JIT to reduce cost and inventory, quality management has to be maintained. This is a very important factor of success in JIT system. Ensuring there is quality supply from suppliers is also vital. Last but not least, JIT research theme is supplier’s management. Ensuring there is quality supply from suppliers is important besides the fact that there should be a good relationship. In this research, most suppliers of Company X had built facilities nearby the factory in order to reduce time spent in distribution and improve coordination with Company X. Ideally, JIT is implementable when addressing the main concerns of producing only when needed and to eliminate costs and time wasted in storing and delivery. For Company X, an automotive industry in China, implementing this system is feasible since it addresses the 5 concerns of Just-In-Time system. Problem

The objectives of this system are to address the problems. It is to retrieve the business return on investment by reducing the storage of in-process inventories and cost, also the related carrying costs. In general, companies hold their inventories in three forms and/or locations; raw materials from the manufacturer,

work in process inventory during the operations of productions, and finished goods that ready to be shipped.
JIT is a philosophy of continuous improvement in which non-value-adding activities (or wastes) are identified and removed for the purposes of:...

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