just in time report

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Introduction

JIT is sometimes said to have been invented by Henry Ford because of his one-at-a-time

assembly line, circa 1913. Just-in-time system was invented (reinvented) by Taiichi Ohno of

Toyota shortly after World War II. Ohno's system was designed to handle large or small volumes

of a variety of parts., (AIDT,2006). This shows that JIT used to originate from the United States

and later developed in Japan.

The statement is also supported by Radisic (2004) in which the history of Just-in-time

begins when the technique was first used by the Ford Motor Company during 1920s, but the

technique was subsequently adopted and publicised by Toyota Motor Corporation of Japan as

part of its Toyota production System (TPS). In 1954, Japanese giant Toyota implemented this

concept in order to reduce wasteful overstocking in car production. This is also proven by AIDT

in the year 2006, Ohno and his associates came to America to study our manufacturing

processes. They determined that our system was much like the system that Japanese companies

were using, but Japanese companies could not afford waste in their systems due to the

devastation to their economy caused by World War II.

They are credited with developing and operating the approach. During the early 1970s,

the application of this philosophy strengthened their competitiveness in the automobile industry.

Other Japanese companies have also adopted the policy and US firms found they had lost much

of their edge in manufacturing. (Duclos et al, 1995). According to Schonberger (1984) the basic

elements of JIT were developed by Toyota in the 1950's, and became known as the Toyota

Production System (TPS). JIT was well established in many Japanese factories by the early

1970's.

Based on these, we can conclude that Just-in-time system originates from the USA by the

Ford company in the year 1920s and they were developed and reinvented by Taiichi Ohno of

Toyota Motor Company to boost their production system in the aftermath of World War II.


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Just-in-time Philosophy and Its Definition

Just-in-time system is defined as "the production of the minimum number of different units, in

the smallest possible quantities, at the latest possible time, thereby eliminating the need for

inventory, (AIDT,2006). This means it is based on the concept of ideal production, it centers on

the elimination of waste in the whole manufacturing environment thus reducing inventory.

According to Sugimori in the year 1977, just-in-time is a process whereby only the

necessary products, at the necessary time, in necessary quantity are manufactured and in

addition, the stock on hand is held down to a minimum.

Langfield (2009) defined just-in-time as the simplification of the production process by

removing non-value added activities. Almost similar, Manou (2007) defined just-in-time as a

manufacturing philosophy, which seeks to eliminate the ultimate source of waste and continuous

improvement.

Based on the definition above, we have come to assumptions that just-in-time system is

based on; First, simplicity. Just-in-time system focuses on simplicity whereby the simple is

better. It can be seen when they focuses on removing non-value added activities in their

production system. Second, it is based on continuous improvement. In Japanese, just-in-time is

associated with Kaizen blitz, which means continuous improvement in lightening fast

(Wikipedia). This indicates just-in-time always focus on improvement in their system. It is a

production and also a journey of learning. Third, visibility. They focus on visibility in which they

will be able to see clearly the problems in the system. This is done through minimizing the

possible source of problem such as non-value added activities and overstocking of inventory.

Next, they also focused on flexibility. Flexibility here means it must be able to adapt to changes

in environment. For example, they need to be able to adapt to changes in markets demand to

ensure a continuous productivity and improvement.


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Five Principles of Just-in-time

1. Total quality management.

Just-in-time emphasize on Total Quality Management (TQM). According to Manou (2007),

JITs Total quality management focuses on qualitative management by fostering an overall

environment supportive of quality improvement. Based on this, quality must be a higher priority

than cost because in the market of today, quality is no longer an order but a qualifying winner to

customers.

Apart from that, Total Quality Management helps in minimizing cost (Manou, 2007).

Minimizing waste in production consists of minimizing losses of time and resources. For

example, loss in time incurred when there were too many unnecessary activities and non value

added activities were being done such as inspection time, reviewing time queue time and so on.

Waste can be defined in production terms as "everything that does not add value to the

product,"(Drury, 2008).

In TQM, Just-in-time focuses on making quality as everyones responsibility, and doing the job

right the first time delegates the responsibility of quality across all levels of the organization.

Work environment should be carried in which everything is in its place and it is a place for

everything to do work. This is supported by Langfield (2009) where managing inventory and

managing quality go hand in hand.., (Langfield, 2009).

2. Production/manufacturing management

Just-in-time is using pull system in their manufacturing system, Goods are produced in each

manufacturing stage, and materials are purchased only when they are needed at the next stage,

(Langfield, 2009). This means it allows demand to set the tone for production. This is difference

with push system where goods are produced or purchased to meet inventory requirement rather

than to meet actual customer demand (Langfield, 2009). The benefit of pull system is that it will

only carry out the production once the demand is determined, thus eliminating the possibility of

excess stocks, overstocking and overproduction. This will only increase cost such as storage

costs and maintenance costs.


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The JIT system uses multiple communication techniques to aid in the production process, two of

which are the use of a Kanban system and an Andon. Kanban system (kan means signal and ban

means card in Japanese) represents a visual control tool that regulates the flow of materials

between cells and workstations and aim to respond to demand by delivering parts and products

Just-in-Time (Manou, 2007). This means Kanban is used to control the flow of inventory

throughout the process in a pull system by using a card to signal demand. Next, Andon system.

An Andon is a light or signal in the process throughout the work stations that will alarm the

workers that there is a problem in the process, and there is a collaborative effort to correct and

prevent the problem from happening again (Manou, 2007). This means it is an autonomation

whereby light systems are installed to warn the workers when a problem occurs. For example,

machinery failure. The term' Jidoka' as used at Toyota means to make the equipment or operation

stop whenever an abnormal or defective condition arises.(Sugimori, 1977). Just-in-time

production also emphasize on reducing lead time in their production. Lead time is defined as The

total time that a customer should wait for in order to receive a product from the moment that he

gives an order (Manou ,2007). To achieve this, JIT focuses on using small lots in production

which means less average inventory and shorten manufacturing lead time. This is supported by

Sugimori (1977) where we put our efforts in development of a production system which is

able to shorten the lead time from the entry of materials to the completion of vehicle.

3. Supplier management

The main focus of supplier management is to establish long term relationships with few firms.

According to Manou (2007), The supplier networks must consist of fewer and better suppliers

and the contracts should be long-term and mutually beneficial. To establish a good supplier

connection, JIT emphasize on using only few suppliers, nearby suppliers, and repeat business

with the same suppliers. There must be an active analysis on suppliers to enable desirable

suppliers to stay with the company. Suppliers are encouraged to extend JIT buying to their

suppliers (Duclos et al, 1995). This is why it is important to work together as a team with your

supplier. We must treat suppliers as our partners in business instead of arm-lengths

(independence) relationship. Communicate problems to the suppliers in a positive manner. Do


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not blame the whole fault to the suppliers. Instead, work together as a team to overcome the

problem to prevent it from happening in the future.

4. Inventory management

Just-in-time also focuses on inventory management. The underlying concept in just-in-time

production systems is that the value of existence of inventory is disavowed. (Sugimori, 1977).

This means JIT focuses on zero inventory. The higher the amount of inventory will lead to or

cause many problems. This can be illustrated in the figure below;

In the picture above, the boat represents the operation of a company. The water level represents

inventory and work in progress and the rocks in the seabed represent problems in the system.

When the level of water (the inventory) is high, they are unable to detect problems in the system

(rocks) as the operation goes on (the boat). However, if the water level is low, the boatman (the

operation) will be able to see the rocks (problems) ahead of him. Based on this assumption, JIT

focuses on minimizing the level of inventory in the company so that problems can be detected

and be prevented. The lower the level of the inventory, the lesser the problems arise.

Source : A IDT, 2006

5. Human Resources Management

The system is based on the respect-for-human where the workers are allowed to display in full

their capabilities through active participation, running and improving their own workshops(Sugimori, 1977). High employee interaction is essential for employees to work together to

change the process for the better.. There is a need for company wide involvement across all

departments. Motivation is needed from a managerial standpoint to maintain continuous

improvement. Problem solving skills are needed to maintain speed of the production line in the


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event of of a halt. Management support and empowerment of the work force is needed so that

employees are not afraid of stopping the process in the event of a problem.

Example of Succesful Just-in-time System

The best example of successful Just-in-time system implementation is by Toyota Motor

Company. The company is credited with developing and operating the approach. According

Duclos et al in the year 1995, he was referring to Toyota Motor Company, Early 1970s, the

application of this philosophy strengthened their competitiveness in the automobile industry.

Other companies have also adopted the policy.

According to Sugimori in the year 1977, Toyota is planning and running its production system

on the following two basic concepts. Based on the two distinctive features mentioned by

Sugimore above, it is assumed that there are two major distinctive features in these systems ;

One of these is the' just-in-time production ,using kanban system. In this type of production,

only the necessary products. at the necessary time, in necessary quantity are manufactured. n

addition, the stock on hand is held down to a minimum. The objective of their JIT system is to

shorten the lead time ,all processes produce the necessary parts at the necessary time and have on

hand only the minimum stock necessary to hold the processes together.

Second, respect-for-human. A system where the workers are allowed to display in full their

capabilities through active participation in running and improving their own workshops.


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References:

Mladen Radisic, (2004).Just-In-Time concept. 1st ed. Serbia: Faculty of TechnicalSciences, University of Novi Sad Department of Industrial Engineering and Management

Local group Novi Sad,.

AIDT, (2006).Just-In-Time Manufacturing. Alabama: AIDT Leslie K. Duclos, (1995). JIT in services: a review of current practices and future

directions for research.International Journal of Service Industry Management. 6 (5),

pp.36-46

Olga Manou, (2007).Application of Just-In-Time Principles to Financial Services. 1st ed.Chios: University of the Aegean Business School Department of Financial and

Management Engineering.

Y. SUGIMORI , K. KUSUNOKI , F. CHO & S. UCHIKAWA (1977) Toyota productionsystem and Kanban system. Materialization of just-in-time and respect-for-human

system, International Journal of Production Research, 15:6, 553-564, DOI:

10.1080/00207547708943149

(2006).JUST-IN-TIME (JIT) PRODUCTION. [ONLINE] Available at:http://personal.ashland.edu/~rjacobs/m503jit.html. [Last Accessed 4 October 2013].

Drury, C., (2008).MANAGEMENT AND COST ACCOUNTING. 7th ed. London: PatBond.

Langfield, S., (2009).Management Accounting. 5th ed. Australia: McGraw-Hill AustraliaPty Ltd.

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