Just In Time is a management philosophy that says products or services ought to be delivered to the customer’s exact specification, quantity and as immediately required – no surplus, no extra, no waste.
Just In Time (JIT) is a managerial school of thought which says that the supply to meet a commercial demand should only happen as and when it is actually needed.
According to JIT methodology excessive inventory is seen as waste. In other words, accumulated business resources that are not directly needed to satisfy current orders, nor for preparedness, are considered a loss. Just In Time and its teaching became highly popularised by Taiichi Ohno, Director & Vice President of Toyota 1954-75.
The benefit of JIT for a near-bankrupt Toyota in the late 1940s was the establishment of a sustainable competitive advantage that would long outlive its proponent.
JIT also became known as the Toyota Production System (TPS). TPS has become adopted as supply chain management for businesses of various types.
Here’s a practical look at Just In Time – in action:
…there are two factories which produce bicycles.
Factory A makes 100 units of the same model every week to be sold at market.
Factory B makes 100 units across 20 models every week to be sold at market.
By nature, the internal processes of Factory B incur much greater complexities when compared with Factory B. Factory A, in contrast, enjoys economies of scale (or rather, ease) – because of simplicity.
But how does Factory B compete for efficiency? It has to reduce waste, in order to cut costs and enjoy equivalent, if not greater profit by comparison. It does this by introducing leaner, more efficient systems for getting all its components assembled and constructed into the end product.
Just In Time is like a relay race…
Each runner in the relay race gets an opportunity to run their leg as quickly as they can, with the necessity of a changeover between legs.
The overall result should be a victory. The relay is a composite of 4-races-in-1. When done properly, the resulting race is run as efficiently as by a single runner – even with the changeovers.
The key? Reducing excess that slows down the entire effort. Every momentary glitch along the way adds a burden of time cost to the eventual finish.
JIT does away with all of that.
What Is Just In Time (JIT)?
Just In Time is a way of thinking in business that aligns operational resources in the most efficient manner for production.
By cutting out excess you are left with a system that delivers end-product as and when needed, without fail.
A pillar of the JIT concept is continual improvement. To do so involves deeply examining business processes within the workplace and discovering inefficiencies first hand.
When problems have been discovered, a Just In Time manager would then take the time to consider innovations for improvement.
Once potential improvements are shortlisted – it’s time to act.
Getting workers to adopt operational change is the objective of JIT management. The resulting changes are then monitored for the desired result.
Core principles of JIT can be found within its vocabulary. Each Japanese word giving light to the mindset underpinning the practice:
- Kaizen: change for good
- Jikoda: machine autonomation
- Muda: waste
- Mura: unevenness
- Muri: excess
- Poka-yoke: error-proof machinery and processes
- Shojinka: a multidisciplinary workforce which is adaptable to meet the changing needs of the business
- Soikufu: having an inventive approach to uncovering new ways around existing problems
The end goal of JIT is a business that has a systemic flow without bottleneck or hindrance. It simply gets the job done, yet can react appropriately to peaks and troughs in demand without producing waste.
The performance of:
- error correction on-the-fly
- evening out operational kinks
- being in a state of continual readiness
…are all important manners associated with a team that embodies great JIT practice or Kaizen (streamlined functioning).
Just In Time Inventory
Streamline inventory management is mission-critical in JIT. The goal of delivering just what is needed, when it is needed – without glitch or shortfall takes a continual preparedness.
Especially where there are many different types of products needed to be put together at the assembly – making sure you’ve got enough components is fundamental.
Two JIT keywords that highlight just how crucial a part ‘inventory’ has to play in the delivery of Just In Time are Mura & Kanban.
Mura means there is an unevenness of demand. If we are unprepared for Mura – we react without any anticipation and have no buffer of raw materials laid up.
By simply having a small store of components ready before every production set-up, you even out the burden on staff with a more predictable flow of activity.
Think of a stock room that expects to receive the following orders over the next 5 weeks:
- 150 parts
- 50 parts
- 50 parts
- 150 parts
- 100 parts
There are two ways to approach stocking for such a situation:
[A] either recruiting just enough labour each week to meet the fluctuating demand.
I.e. in week one, utilise 3x as much labour as weeks 2 and 3.
[B] produce a buffer of 50 parts as a float. Then, consistently pick 100 parts per week.
JIT management would approve choice [B].
JIT ensures that each week there are always sufficient parts available for the assembly team to receive and also in weeks with higher demand, like week 1 and week 4, the inventory picking team will not be overburdened with much more workload than other weeks.
To facilitate this system, JIT originators developed a card-based messaging system for scheduling work, which was later called Kanban.
Kanban literally means billboard or signpost in Japanese.
This illustrates exactly how Kanban works as a JIT inventory system:
Each request for a product component from the assembly team is written on a card and posted on the inventory team billboard. As long as the job is pending or incomplete, the card remains in view on the board. Once complete, the card relating to the job done was moved along, which in turn makes room for another job card to replace the one representing the job done.
In this way, supply is being pulled along by demand. In other words, production is being fulfilled on a made to order basis.
Just In Time Manufacture
Just In Time manufacture adheres to the counter-intuitive idea that economy is derived from achieving constant flow rather than magnitude of scale.
Much of how managerial personnel is trained in modern business is based on the desire for achieving scale to make savings. A thought that bigger is better.
Yet Just In Time contests that good business economies are gained from engineering efficiencies throughout the timeline of production.
It promotes the theory that real profitability is not achieved until end products are received by customers and paid for.
Raw materials and unfinished assembly work is therefore wasteful until finished off.
An example of JIT in manufacturing would look like this…
Imagine if an assembly line worker had to lift a heavy engine block, by hand, during each cycle of work because of a broken conveyor. This would lead to a slower assembly, inaccurate product quality, damage to the engine block or perhaps even personal injury. All of these outcomes are additional costs to the business.
The answer? To invest in either repairing or replacing the broken conveyor.
JIT manufacturing aims to shave off lag and reduce errors along the timeline of production from start to finish.
Always working to make improvements, never settling for how things are.
This is Kaizen (change for good).
What Are The Origins Of JIT? Explain History With Toyota
JIT was born out of adversity.
It was a do-or-die kind of reaction to a problem faced with real consequences.
In the early to mid-1940s, Toyota (the far eastern car manufacturer) was faced with tough competition from Detroit’s big car brands, such as Chrysler, Ford, and Dodge among others.
Toyota found that its American counterparts were bigger, better and seemingly unsurpassable.
When Eiji Toyoda – President of Toyota, visited Detroit in 1950, his burgeoning firm was making 40 cars per day. Ford Motor Co., by comparison, was producing approximately 8,000 cars. This is 200-times the scale advantage.
So, how would Toyota exports compete in a global car market dominated by US manufacturing giants?
Minimum waste, low costs – keep constantly improving.
With the production process re-engineering under the headship of Taiichi Ohno, a promising machine shop manager who rose the ranks of management – Toyota was turning a new leaf of necessity.
Somehow with a smaller scale capacity for production, Toyota would have to find competitive advantage and discover commercial might in doing things quicker, with lower cost and more accurately – than their larger Western competitors.
Toyota succeeded. And scaled to the tune of 27,000+ cars per day (circa 2014). But despite such growth, today Toyota is still esteemed by many as the leanest, most efficient car manufacturer in the world.
What Is The Purpose of JIT?
JIT is a construct. An image that vaguely resembles a living encounter – something that actually happened in real life. The response of a certain man, Taichii Ohno, to real-life business problems, which he experienced.
This challenge was to turn around a near-bankrupt manufacturing business that was being outperformed by its competitors, who were larger and making more profit.
The purpose of JIT is business turnaround.
How Does JIT Differ From Traditional Manufacturing?
It is often said that traditional manufacture is a push system, in contrast to JIT which is a pull system of manufacture.
What does this mean?
In a push manufacturing company – decision-makers discern from research, analysis and managerial projections what the expected demand is and make accordingly.
In a JIT pull manufacture company, production is governed by customer order requests. What is made is only exactly what is required at any given time.
What Are The Requirements For Implementing JIT?
The requirements for implementing JIT are quite simple.
Firstly, a dedication to changing things for good, aka Kaizen. And what better motivation than a serious looming threat. In Toyota’s case – their motive was near financial ruin. This promoted their desire for change.
After Kaizen, the next step for JIT is Gemba gembutsu – which is a desire to witness problems with your own eyes, therefore appreciating the true nature of the problem. “He taught us to see!” is what some production managers under Taiichi Ohno said, recalling their experience of learning from him.
Thinking creatively is a key quality associated with Just In Time. Considering novel approaches to bypassing a problem. JIT being an iterative and continuous work – problem-solving can never be far from the mind of a JIT practitioner.
A multidisciplinary perspective on staff training and core competencies is critical to achieving Kaizen. Team members have got to be able to fit into one role, or another, with relative ease and minimal upheaval. This introduces a certain interdependence leading to organizational integrity and efficiency.
What Are The Advantages & Disadvantages Of JIT System?
Just In Time management offers profitable benefits, but is not without its associated risks.
Using JIT, producers have a high dependence on suppliers. Supply is tailored to match exactly what is demanded when it is demanded. If there is any discrepancy in supply – the whole of production grinds to a halt and a time-sensitive customer will be disappointed.
The unthinkable happened in 1997 to Toyota when a brake and clutch supplier had a factory burn down. The knock-on effect for Toyota was a near-complete production shutdown for almost a week. It was estimated that for every day Toyota stopped production, the company lost approximately $210M. To overcome problems like this, Toyota has diversified supply to ensure contingency should suppliers incur unforeseen obstacles.
Another disadvantage of Just In Time is how long it can take to implement a corporate culture that embraces change readily. With Toyota, it is documented that Taiichi Ohno took some 20+ years to eventually instil the changes he desired to see the organization adopt.
JIT is definitely not a quick fix and is also reliant on quick and nimble responses to error and bottleneck.
Staff training must account for prompt & adequate cover when things go wrong.
Having built-in redundancy is key with JIT. Engineering failsafes to catch problems when they happen without sacrificing production.