You’ve probably heard of just-in-time (JIT) manufacturing. Maybe you’re considering implementing it at your facility or are wondering about its advantages and drawbacks. A closer look at the subject may help you determine whether it would be a good fit for your company and industry.
JIT is a type of management that involves producing goods in the relevant quantities when customers want them and delivering them immediately without keeping extra stock in inventory. If you have a JIT manufacturing system, you make products when customers order them, instead of creating stockpiles of commodities that you hope to sell.
The idea of JIT is typically attributed to an executive at Toyota named Taiichi Ohno. Ohno was tasked by Toyota to improve its production. His management team visited the U.S. in the early 70s. While there, he noticed that a Piggly Wiggly supermarket handled their inventory by restocking only what customers purchased. By doing so, the store replenished its shelves but did not order excess. As a result of his visit, Ohno developed the JIT model over the following years. Western manufacturers began experimenting with the concept a short time later.
JIT manufacturing differs from traditional manufacturing. With traditional methods, companies estimate what customers will want and use that approximation to make a certain number of products. Manufacturers also typically produce those items in large batches to make the process more efficient and keep prices low, particularly if machines require a lot of time to begin.
Average manufacturing techniques often involve long lead times, large amounts of products in development at any given time, and big numbers of finished goods that have yet to be ordered. If a customer orders an item that isn’t currently stocked, he or she may have to wait for weeks for the commodity to be manufactured — unless it can be pushed through, which may disrupt the established production schedule.
Alternatively, JIT manufacturing only creates those goods that customers order, which reduces the number of items in production and completed products. JIT can also reduce lead times and lower the risk that the company will manufacture merchandise it cannot sell.
Another benefit includes reducing the cost of supplies, as the company won’t have to purchase materials it does not need, thus decreasing the space needed for inventory. JIT manufacturing can also produce higher quality products and improve productivity as well. For more information about JIT manufacturing and how to address some common issues that may arise, check out the accompanying resource.