Just in Time (JIT) is a stock system controlorganizations utilize to expand productivity and reduce waste by gettingmerchandise when required in the production process; this way lessening stockexpenses. This method expects producers to estimate request precisely (Benton Jr, 2013, p.
29). Fewerinventories on hand means the company gets to pay less in storage and insurancecosts. JIT also requires less cash in the short term (Thomas et al, 1997).JIT inventory system was firstintroduced by the Ford MotorCompany. Henry Ford’s My Life and Work- “we buy for immediate needs and only tofit into production plan. We make arrangements for raw materials to bepurchased and delivered on schedule”.
The Ford Company adopted this techniquewhich saved a huge amount of money, decrease in obsolete materials and rapidturnover .Toyota and since has been embraced byother car makers. The framework is carried out by booking/ requesting anddelivering of parts; which are delivered as required in the generation procedure(Monden 2011, pp8-9). For instance,if a car’s windshield is set up on Tuesday and engine on Wednesday, at thatpoint those particular parts are not delivered by the organization’s provideruntil just before those individual days().
png?fit=775%2C455 JIT serves to maximize organizationsefficiency, utilize resources and reduce wastes as well as costs. Costs arereduced from overproduction- the right amount of product is produced. Time-right amount of time would be take to produce the specific product, wherequality would be assured.
There wouldn’t be unnecessary movement of stock or job saving transportationcosts. Less obsolete stock and machinery lasts longer as there wouldn’t be excessive use of them (Benton Jr, 2013, p.129).Efficiency is obtained through the increase ofproductivity and decrease of cost. JIT allows employees to focus on oneproduction; meaning focus would be solely on product allowing for less timespent on inspection, movement, queuing and storage.
Quality assurance would beestablished as production would be of highest quality (Aycock, 2003).For JIT to be achieved, processes have to be set in placefor organizations, such as; Pull system, Close vendor etc 0.1 -https://paginas.fe.up.pt/~acbrito/laudon/images/fg_03_13.jpg) The idea of pull system means organizations react to the demand,or request, of the customer (or market). Producers respond by designing theiroperations to react to the constantly changing necessities of clients.
Thoseready to create to the demand of clients don’t have to manufacture merchandise thatconventional batch and queue makers must depend on. Delivery arrangements ofproducts to clients is less troublesome, and request turns out to be moresteady if clients believe in realizing that they can get what they need whenthey need it (Monden 2011, p.35).Organizations using JIT productionusually establish a good and close relationship with their suppliers. Thesesuppliers are required to supply quality materials on a frequent basis.
Organizationswork closely with providers to help them understand the favored quality levelsand to urge them to provide more dependable, durable and high quality merchandise(Chen & Paulraj, 2004). Organizationsthrive to have reliable suppliers in order to be able to rely on their quality;therefore repeat purchasing from clients to organization and organization tosuppliers (Harrison, 1992).Supplierslikewise must be wiling and ready to transport in little quantities all thetime.
Generally, sellers themselves will work under JIT frameworks. A seller isprobably going to have a few unique clients, some still adopting the traditionalway of operating and others, JIT (Hay,1988). Under JIT obtaining, great provider connections are exceptionallyhuge. Clients take measures to limit their arrangements of sellers,concentrating on keeping up close working associations with a couple of goodones. Because of the requirement for repeated, small deliveries, a great dealof purchasers attempt to look for nearby providers to reduce the lead time fordeliveries and to diminish lead time variability.
JIT purchasing is enhanced bylong term connections amongst clients and providers. Providers are all the moreready to give resources to organizations that frequently purchase from them. Alsomore willing to provide on credit (Ansari& Modarress, 1990).
0.3- https://vative.com.au/wp-content/uploads/2015/03/JIT_VSM.png A few factors, nonetheless, make JITsystem a precarious recommendation. A key worry here is the degree to whichfirms are reliant upon specific providers.
For instance, if a firm were tocommission a very restrictive item to a solitary provider (single providersbeing normal in JIT), a JIT stock framework would put such a firm at asignificantly higher danger of sham for the benefit of the provider on thegrounds that the firm would have no prompt material to support an interferenceof supply. Such an intrusion of supply may be costly to the point that the firmmay very well enable the provider to raise the cost (Chopra & Sodhi, 2004, p53).Another risk could be supplier not able satisfya company’s requests. This may be due to internal issues such as work strikes. Suppliers’workers could withhold labor, again prompting an interference of the company’ssupply. In any case, internal issues can mean a number of issues that keep anassociation’s provider from providing. The fact of the matter is that by encouragingthe connection between organizations, JIT system builds the hazard that issuesor disappointments toward one side of the chain may be felt on another end (Bryan, 2002, pp17-28)However, this risks, to some extent maybe avoided.The use of technology lessens an organizationsordering, carrying and storage costs.
It enables the organization to make andapprove of purchase orders, update stock records, and pay for stock electronically(). Additionally, using technology also enables many organizations to haveaccess to records of products instantly, anytime and anywhere; this reduces theamount of hours for staffs to spend checking on stock. Less staff hours meanless cost (Kannan & Tan, 2005, pp.153-162).JIT framework requires a comprehensionof objectives, targets and goals of the organization. After the objectives areset up, the aim towards achieving overall goal is to start by figuring out whatis required to meet those targets (Schniederjans,1993).
The objective of a JIT approach is to build up a framework thatenables organizations to have just the materials, hardware and individuals requiredto get the job done.Since each assembling procedure isunique, it is up to the individual organization to decide the level of approachand the application of JIT. Be that as it may, it is vital to characterize thearrangement and targets before setting up a JIT producing framework. It isdifficult to build up another JIT framework that can be utilized effectivelywithout change. Accordingly, genuine thought and consideration should be takenin order to make an arrangement for Just-In-Time, which will profit overallperformance.