Just In Time (JIT)

Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs.

To meet JIT objectives, the process relies on signals or Kanbans located in different points in the process, which tell production when to make the next part. Kanbans are usually tickets, but can be simple visual signals, such as the presence or absence of a part on a shelf. JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement, the key areas to focus on are flow, employee involvement and quality.

Philosophy

The philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden causes of inventory keeping.

Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting.

In short, the just-in-time inventory system focus is having the right material, at the right time, at the right place, and in the exact amount, without the safety net of inventory. The JIT system has broad implications for implementers.

Benefits

Main benefits of JIT include:

• Simplify inventory flow and its management.
• Having multi-skilled employees trained to work on different parts of the process, allowing companies to move workers where they are needed.
• Production scheduling and work synchronized with demand. If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training.
• Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced.

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