Just-in-time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs. In order to achieve JIT the process must have signals of what is going on elsewhere within the process. This means that the process is often driven by a series of signals, which can be call-board, that tell production processes when to make the next part. call-board are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. When implemented correctly, JIT can lead to dramatic improvements in a manufacturing organization's return on investment, quality, and efficiency.
Quick communication of the consumption of old stock which triggers new stock to be ordered is key to JIT and inventory reduction. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.
For instance, its effective application cannot be independent of other key components of a "lean" system or it can, as its academic founder noted, "...end up with the opposite of the desired result.". In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning), however research of today's leading corporations demonstrates that basing JIT on the presumption of stability is inherently flawed |
|
