Importance of Just-In-Time Inventory System -

Home
>
Business Management
>
Importance of Just-In-Time Inventory System

Importance of Just-In-Time Inventory System

In today's competitive world shorter product life cycles, customers rapid demands and quickly changing business environment is putting lot of pressures on manufacturers for quicker response and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs can easily become prohibitive. A wiser approach is to make your production agile, able to adapt to changing customer demands. This can only be done by JUST IN TIME (JIT) philosophy.

Taiichi Ohno, a former shop manager and eventually vice president of Toyota Motor Company, is the individual credited most for the with the development of just-in-time. It is a term used to describe the Toyota production system, is widely recognized today as the one of the most efficient manufacturing system in the world. In simple words we can explain JIT only required necessary units be provided in necessary quantities at necessary times. Producing one unit extra is as bad is being one unit short. Completing one day early is as bad as finishing one day late. Items are supplied "just-in-time". Ohno describes the development of JIT as

*By actually trying, various problems become known. As much problems become gradually clear, they taught me the direction of the next move. I think that we can only understand how all of these pieces fit together in hindsight.

The concept is very simple, if you produce only what you need when you need it, then there is no room of error. JIT has truly changed the face of manufacturing and transformed the global economy. JIT is both a philosophy and collection of management methods and techniques used to eliminate waste (particularly inventory). In JIT workers are multifunctional and are required to perform different tasks. Machines are also multifunction and are arranged in small U-shaped work cells that enable parts to processed in a continuous flow through the cell. Workers produce pars one at a time within cells and transport those parts between cells in small lots. Environment is kept clean and free of waste so that any unusual occurrence are visible. Schedules are prepared only for the final assembly line, in which several different models are assembled at the same line. Requirements for the component parts and subassemblies are then pulled through the system. The "PULL" element of JIT will not work unless production is uniform and lot sizes are low. Pull system is also used to order material from suppliers (fewer in numbers usually). They make be requested to make multiple deliveries of the same item in the same day, so the manufacturing system must be flexible.

Just-in-time inventory is viewed as the waste of resources and considered as obstacle in improvement. As there is little buffer inventory between the workstations, so the quality must be high and efforts are made to prevent machine breakdowns. When all these things are taken into consideration, system produces high-quality goods, quickly and at low cost. This system is also being able to respond to changes in customer demands. These elements of JIT can also be applied to the almost any operation, including service operations.*K.Suzuki, The Manufacturing Challenge(New York: Free Press, 1985), p250

Ali Abbas, Student of Operations Management, Currently doing BBA form Mohammad Ali Jinnah University one of the leading institute in Business Administration & Computer Sciences of Pakistan

In The News:

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.marketwatch.com/news/story/Single-Source-Introduces-New-Advanced/story.aspx%3Fguid%3D%257B5F9B6094-79DA-4B91-9089-E3100016FC14%257Dcid=1276524746ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGZ4tFhLqeqJ4j4JVkKIya0-99FeQSingle Source Introduces New Advanced Quote bManagement/b (AQM)(TM b.../b/abrfont size=-1font color=#6f6f6fMarketWatchnbsp;-/font nobr9 hours ago/nobr/fontbrfont size=-1All functions seamlessly integrate to the inherent back-office financials, inventory, purchasing and bmanagement/b reporting functionality of SM-Plus-meeting b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.businesswire.com/news/google/20081201005164/encid=1276524746ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEoYZtBfvcaHTs2e64W3i_mGKyv-gKANA Recognized by Leading Industry Publications for Innovation b.../b/a font size=-1 color=#6f6f6fnobrBusiness Wire (press release)/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276524746hl=ennobrall 22 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://business.maktoob.com/NewsDetails-20070423198563-US_manufacturing_hits_26_year_low_ISM.htmcid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGRlJClan3Twx70gYeG9E_xMtAtewimg src=http://news.google.com/news?imgefp=W1c58r60zdsJimgurl=business.maktoob.com/BusinessImages/News/20070423198563/Feature.jpg width=80 height=48 alt= border=1brfont size=-2Maktoob Business (press release)/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.marketwatch.com/news/story/global-manufacturing-gauges-collapse-november/story.aspx%3Fguid%3D%257B89D71098-0129-432D-875A-1EECDDE62475%257D%26dist%3Dmsr_1cid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFih444edpBLtmNQhP3DQCao7oZRAECONOMIC REPORT Global manufacturing gauges collapse in November/abrfont size=-1font color=#6f6f6fMarketWatchnbsp;-/font nobr6 hours ago/nobr/fontbrfont size=-1b.../b of price pressures hit an all-time low, according to a survey of corporate purchasing managers released Monday by the Institute for Supply bManagement/b. b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.washingtonpost.com/wp-dyn/content/article/2008/12/01/AR2008120101022.htmlcid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEab0iaNEc5-w3j8yxysFKQpZi7jAManufacturing index drops to 26-year low/a font size=-1 color=#6f6f6fnobrWashington Post/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://money.cnn.com/2008/12/01/news/economy/ISM_November/%3Fpostversion%3D2008120110cid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNHmZ9-TSpgglz-8qGcDF57tVgTgYgManufacturing index at 26-year low/a font size=-1 color=#6f6f6fnobrCNNMoney.com/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bizjournals.com/nashville/stories/2008/12/01/daily9.htmlcid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEAiasX-8Mmk7-ecD4GWU9VZHvPmAManufacturing hits 26-year low/a font size=-1 color=#6f6f6fnobrBizjournals.com/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://money.cnn.com/2008/12/01/news/economy/ISM_November/%3Fpostversion%3D2008120111cid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGsnBCIJUBv8-rjNXVGN50Lkkz9LgnobrCNN/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.latimes.com/business/la-fi-weekbox1-2008dec01,0,7052508.storycid=1276422140ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNE5rEPOZigUHPXS18E5mJqRxtRUkAnobrLos Angeles Times/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276422140hl=ennobrall 612 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.charlotteobserver.com/551/story/387420.htmlcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEPbdXi5rVvXc3puZgThbQ9xVOKYwimg src=http://news.google.com/news?imgefp=_opva8BCsOsJimgurl=media.charlotteobserver.com/smedia/2008/12/01/13/CONSTRUCTION.sff.embedded.prod_affiliate.138.jpg width=64 height=80 alt= border=1brfont size=-2CharlotteObserver.com/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.nytimes.com/2008/12/02/business/economy/02econ.html%3Fhpcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGQtuc17JkCWSbvRmjAeZGWlj-CdQConstruction Spending Reflects Economic Slowdown/abrfont size=-1font color=#6f6f6fNew York Times,nbsp;United Statesnbsp;-/font nobr1 hour ago/nobr/fontbrfont size=-1The Institute for Supply bManagement/b’s monthly index of manufacturing activity fell to 36.2, from October’s 38.9. The reading is worse than Wall Street b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.theaustralian.news.com.au/business/story/0,28124,24738136-20142,00.htmlcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNESxTpVBa9-3n1ahhS9_T56xldaGwUS manufacturing weakest since 1982/a font size=-1 color=#6f6f6fnobrThe Australian/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://blog.pennlive.com/business/2008/12/construction_activity_oil_pric.htmlcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNG-UegH4YnTmk-WaFE2rN89UvHX6wConstruction activity, oil prices, stocks all slip/a font size=-1 color=#6f6f6fnobrThe Patriot-News - PennLive.com/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bizjournals.com/phoenix/stories/2008/12/01/daily2.htmlcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNH1xEgCew01kHvxBGiMJMKN9kQONAConstruction spending fell again in October/a font size=-1 color=#6f6f6fnobrBizjournals.com/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.iht.com/articles/ap/2008/12/01/business/NA-US-Economy.phpcid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGJG3MjanX8GkqnaJsC4cZ01CWfJgnobrInternational Herald Tribune/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.guardian.co.uk/business/feedarticle/8105270cid=1276553836ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEDmOS5fuuafuyEKPTR4yDr-BoF1gnobrguardian.co.uk/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276553836hl=ennobrall 270 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.wnct.com/nct/news/state_regional/article/early_christmas_tree_sales_up_in_nc/24998/cid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNHAEzLW_BqApT-WVxXH4F4pMjK10wimg src=http://news.google.com/news?imgefp=IV0dEMt91z4Jimgurl=media.wnct.com/wnct/img-story/images/uploads/Christmas_Economy_Graphic_AP.jpg width=80 height=60 alt= border=1brfont size=-2WNCT/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://economix.blogs.nytimes.com/2008/12/01/price-tags-on-partridges-and-pear-trees-a-different-cpi/cid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFbAt8b3-iULuuBnhf5b73n7JMVHQPrice Tags on Partridges and Pear Trees: A Different CPI/abrfont size=-1font color=#6f6f6fNew York Times,nbsp;United Statesnbsp;-/font nobr2 hours ago/nobr/fontbrfont size=-1By Catherine Rampell For the last 24 years, PNC Wealth bManagement/b (or its predecessor, Provident Bank) has released this whimsical index, a measure of the b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.youtube.com/watch%3Fv%3D_PPfujQH9BIcid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNERUaDOZgN4KXftGM5O801IRB5tqgVideo: 12 Days of Christmas#39; Items Would Cost $86,609/a font size=-1 color=#6f6f6fnobrAssociatedPress/nobr/fontobject width=448 height=356param name=movie value=http://www.youtube.com/v/_PPfujQH9BI/paramparam name=wmode value=transparent/paramembed src=http://www.youtube.com/v/_PPfujQH9BItype=application/x-shockwave-flashwmode=transparentwidth=448height=356/embed/objectbr/fontfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.google.com/hostednews/ap/article/ALeqM5hbRtA6z3x9Zijla9K78YuJGQEq3QD94PT2QO0cid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFTxWVD3XLO5vOhuWnteUFQ6GvWeg#39;12 Days of Christmas#39; items would cost $86609/a font size=-1 color=#6f6f6fnobrThe Associated Press/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.telegraph.co.uk/finance/3540138/Twelve-Days-of-Christmas-would-cost-21000.htmlcid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNGfn-8XV41xuhf6LiSoGWsoyZXngwTwelve Days of Christmas would cost $21000/a font size=-1 color=#6f6f6fnobrTelegraph.co.uk/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://blogs.reuters.com/shop-talk/2008/12/01/costly-classical-christmas/cid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNEFVlFlaN5dTHszqacXFwsJ294oJwnobrReuters/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.guardian.co.uk/business/2008/dec/01/useconomy-christmascid=1276433807ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNG2G4XB-MQnpPIL5_yRLdjhuQ9aWAnobrguardian.co.uk/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276433807hl=ennobrall 348 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.reuters.com/article/innovationNews/idUSTRE4AP0Z620081201cid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFs1VihLjurDrE27wNWGf1avwyDqwimg src=http://news.google.com/news?imgefp=zD_6cUQ7_F0Jimgurl=www.reuters.com/resources/r/%3Fm%3D02%26d%3D20081201%26t%3D2%26i%3D7025988%26w%3D192%26r%3D2008-12-01T161406Z_01_BTRE4AP0IB600_RTROPTP_0_AIG width=80 height=55 alt= border=1brfont size=-2Reuters/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.forbes.com/home/2008/12/01/aig-abu-dhabi-markets-equity-cx_md_1201markets16.htmlcid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNHnn_W2MUPxpytAiTFQILNeXNWkZwAIG Sheds A Private Bank/abrfont size=-1font color=#6f6f6fForbes,nbsp;NYnbsp;-/font nobr5 hours ago/nobr/fontbrfont size=-1The insurer has sold its wealth bmanagement/b unit to an Abu Dhabi investment company for $254 million. AIG is shedding assets to help it ride through a b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.reuters.com/article/mergersNews/idUSBNG40949220081201cid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFI0SAOUXCej_fvX1f3oWjISVRFXwUPDATE 1-AIG to sell AIG Private Bank to UAE#39;s Aabar/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://online.wsj.com/article/SB122813841343668791.html%3Fmod%3Dgooglenews_wsjcid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFYbHxPqEoTIe2XIfYE7dwPSazhAQAIG to Sell Private Bank to Aabar/a font size=-1 color=#6f6f6fnobrWall Street Journal/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.tradearabia.com/news/BANK_153281.htmlcid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNE5E6px33R0X9dSTIG1WVTLMWemagAabar acquires AIG Private Bank/a font size=-1 color=#6f6f6fnobrTrade Arabia/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.investmentnews.com/apps/pbcs.dll/article%3FAID%3D/20081201/REG/812019992cid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNHHzvsyvH1c7p_erM9F5jAduczhtgnobrInvestmentNews/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.capitalfm.co.ke/business/International/AIG-to-sell-it%27s-Private-Bank-1216.htmlcid=1276378241ei=BXg0SfzhHYLg6AOUv42WDgusg=AFQjCNFUMGj4iPzIkZFK2NHhHnsbAoj3-wnobrCapital FM/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276378241hl=ennobrall 162 news articles/nobr/a/font/div/font/td/tr/table

management - Google News

Importance of Just-In-Time Inventory System

Business Management