JIT is a philosophy embodying various concepts that result in a different way of doing business for most organizations. The basic tenets of this philosophy include :
- All waste, anything that does not add value to the product or service, should be eliminated. Value is anything that increases the usefulness of the product or service to the customer or reduces the cost to the customer.
- JIT is a never ending journey, but with rewarding steps and milestones.
- Inventory is waste. It covers up problem that should be solved rather than concealed. Waste can gradually be eliminated by removing small amounts of inventory from the system, correcting the problems that ensue, and then removing more inventory.
- The customers definitions of quality, their criteria for evaluating the product, should drive product design and manufacturing system. This implies a trend toward increasingly customized products.
- Manufacturing flexibility, including quick response to delivery request, design changes, and quantity changes, is essential to maintain high quality and low cost with an increasingly differentiated product line.
- Mutual respect and support based on openness and trust should exist among an organization, is employees, its suppliers, and its customers.
- A team efforts is required to achieve world class manufacturing capability. Management, staff and labor must participate. This implies increasing the flexibility, responsibility, and authority provided to the hourly worker.
- The employee who performs a task often is the best source of suggested improvements in the improvements in the operation. It is important to employ the worker brains, not merely the hands.
JIT is a very eclectic approach. It includes many old ideas and some new ones and relies on basic concepts from many disciplines, including statistic, industrial engineering, production management, and the behavioral sciences.
But first and foremost, it is pragmatic and thus empirical. Discovering “what works” and why it works requires that plant operations be studied thoroughly. This requires the collection and analysis of relevant data concerning the plant’s operation and it’s performance. This pragmatism causes the manufacturing process and it’s environment to be viewed as a research laboratory, similar to a university hospital, in that the primary task may be to be produce quality output but another important goal is to learn how to do it better the next time.
Traditionally, inventory has been viewed as an asset, one that can be converted to cash. The Just In Time vies is that inventory does not add value but instead incurs cost, and thus is waste. Holding inventory is analogous to not receiving any interest for a deposit in a bank and, furthermore, paying to keep it there. Traditionally, holding inventory was seen as being less costly than correcting the production and distribution inefficiencies that inventory overcame. For example, large lot sizes spread the cost of expensive setups across many parts. JIT takes a different view.
JIT views inventory as a symptom of inadequate management, a method of hiding inefficiencies and problems. Inefficiencies that cause inventory include : long and costly setups, scraps, lengthy and widely varying manufacturing lead times, long queues at work centers, inadequate capacity,machine failure, lack of worker an equipment flexibility, variations in employee output rate, long supplier lead times and erratic supplier quality.
JIT emphasizes that solving each of these problems will reduce he need for inventory and improve productivity. It strives to have the right material, at the right time, at the right place and in the exact amount. Thus, the name “Just In Time” is used by many to designate an organized and continuing program to improve operations productivity.
JIT approach includes the following :
a) Reduction of setup time to achieve smaller production lot sizes
b) Increased use of sequential flow processes such as dedicated assembly lines and group technology cells
c) Increased use of multifunction workers
d) Increased flexibility of equipment and capacity
e) Increased use of preventive maintenance
f) Increased stability and consistency in the schedule
g) Longer term relations with suppliers
h) More frequent deliveries from suppliers
i) Improved technical support of suppliers
j) Employee involvement programs such as quality circles
k) Statistical process control
l) The stop production prerogative
m) Cause and effect analysis
Donald W. Fogarty, John H. Blackstone, Thomas R.Hoffmann., Production and Inventory Management, College Division South-Western Publishing Co,Cincinnati, 1991.