JIT

The just-in-time (JIT) inventory method is an approach where materials, parts, and other

goods are ordered only in quantities required to meet immediate production needs. These

items are then carefully scheduled to be received at precisely the time they are needed.

This increases efficiency, reduces waste, and ultimately minimizes inventory carrying costs.

JIT was developed in Japan and is also known as the Toyota Production System.

Disadvantages of JIT

There is little room for mistakes as minimal stock is kept for re-working faulty

product

Production is very reliant on suppliers and if stock is not delivered on time,

the whole production schedule can be delayed

There is no spare finished product available to meet unexpected orders, because all

product is made to meet actual orders – however, JIT is a very responsive method of

production

Advantage:

Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time.

Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management.

Employees with multiple skills are used more efficiently. Having employees trained to work on different parts of the process allows companies to move workers where they are needed.

Production scheduling and work hour consistency synchronized with demand.

Increased emphasis on supplier relationships.

Minimizes storage space needed.

Smaller chance of inventory breaking/expiring

Process Re- engineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical modern measures of performance, such as cost, quality, service, and