Just-in-Time Production

Along with Jidoka, Just-in-time (JIT) production is one of the pillars of the two Toyota Production System. It is a production method that fundamentally changed the way large-scale production occurred in the 20th century, and is the basis for Lean Manufacturing (Lean for short), which is the school of thought many modern companies have modeled themselves after.

JIT production is often called a pull system because instead of using traditional push production where scheduling is done based on historical data and demand forecasting, production is scheduled based on actual customer orders. Rather than predicting demands from customers, the JIT method requires that actual customer demand exists. Production doesn't begin before an order triggers it. This system not only reduces the amount of extra inventory, but also reduces the amount of work in progress at one time.

JIT works best with one-piece flow operations where one product is completed at a time instead of performing each step of a process in batches. This is the production method that best aligns with Lean because it minimizes waste, and makes workers operate more efficiently.

Taiichi Ohno, a leader at Toyota, developed this system. JIT production was inspired, of all things, by supermarkets. He observed the way supermarkets stock shelves. These stores only refill a shelf when a customer buys a product. That action triggers the restocking of the shelf and the reordering of products from suppliers.

The same idea applies in a JIT manufacturing environment. Customer purchases trigger upstream actions.

A JIT system is often controlled by visual cues called kanban cards. Downstream processes send cards (or other signals) upstream to inform people they should begin taking special actions (such as making products).

JIT also reduces inventory within a process, which helps expose problems with the system. Excess inventory can cover up problems. Think of it like a body of water with rocks in it. The water represents inventory and the rocks represent problems. When the water level is lower (when there is less inventory), the rocks (the problems) emerge. Consequently, it's easier to identify and resolve problems when there's less inventory.

History of Just in Time 

Taiichi Ohno, a leader at Toyota, developed this system. JIT production was inspired, of all things, by supermarkets. He observed the way supermarkets stock shelves. These stores only refill a shelf when a customer buys a product. That action triggers the restocking of the shelf and the reordering of products from suppliers.

Today, JIT is commonly associated with minimizing waste in production processes, and Taiichi Ohno is frequently referred to as the pioneer of this concept.

Toyota's strategy for overcoming difficulties and survival was based on concentrating on three key aspects: people, facilities, and systems. The company understood that the success of JIT depended on the engagement and commitment of every team member, the optimization and efficiency of their facilities and processes, and the careful planning and scheduling of quality and production to match customer demands.

When an organization effectively implements the JIT system, it can become more competitive in the market by cutting down on waste and making better and more efficient products.

Advantages and Disadvantages of JIT

Here are some advantages and disadvantages of the Just-in-Time management philosophy: 

Advantages: 

• Production transitions are quick, allowing for easy switching between different products.
• Lower costs due to reduced warehouse requirements
• Companies only spend on raw materials they need, which reduces waste and saves money.

Disadvantages of JIT Inventory Systems:

• Potential issues in the supply chain can disrupt production.
• A supplier's delay in delivering raw materials may halt the entire production line.
• Unexpected orders can cause delays in delivering finished products to clients.

Example of JIT

Just in Time manufacturing has been implemented successfully in several organizations across various industries. Here are some examples:

Toyota: The automobile giant is known for being a leader in implementing the JIT approach. When someone places an order, the company only gets the necessary materials at the factory when it's time to start building the car. This helps them save money by not having to store a lot of materials beforehand.

Dell: The computer manufacturer Dell optimized its supply chain and manufacturing to build devices based on customer orders to avoid holding large inventories of finished products.

Honda: Another automobile brand from Japan, Honda ensures components arrive at assembly lines exactly when needed to reduce storage space and costs associated with maintaining raw materials.

Amazon: Amazon and Procter & Gamble (P&G) collaborate through a JIT-like system. They designate a section in P&G's Pennsylvania warehouse for Amazon's use, where P&G stocks products. Amazon employees then take over, handling packaging, labeling, and shipping directly to customers. This setup allows Amazon to quickly deliver products to customers in the Northeast and Canada within 24 hours.

Apple: They work closely with their suppliers and have found a way to outsource some of their production. This has made Apple more efficient in keeping most of its products in stores and avoiding excessive stockpiling. This approach has helped the tech company become one of the most successful in the world.

Nike: The company introduced the Just-in-Time system to better connect its production sites across Southeast Asia. Implementing this approach helps Nike successfully reduce lead times by 40%, boost productivity by 20%, and start offering new products 30% faster than before.

Potential Risks of Just in Time Manufacturing

 A major advantage of using JIT production is that it reduces the need to store large quantities of inventory, which improves efficiency and saves money; however, if there’s a problem with suppliers or a sudden increase in demand, it can disrupt the manufacturing process.