What is Just-in-Time Manufacturing?

JIT manufacturing helps organizations control variability in their processes, allowing them to increase productivity while lowering costs. JIT manufacturing is very similar to Lean manufacturing, and the terms are often used synonymously.

In this post, we’ll discuss the ins and outs of JIT manufacturing, including its history, the basic concepts included in this methodology, and its potential risks.

It’s unknown exactly when Japanese manufacturers began adopting JIT manufacturing practices, but it is certain that they were triggered by the economic climate of the post-World War II era. Following the war, Japan lacked the cash to finance big-batch, large inventory production methods used by other developed countries. They also had high unemployment and a lack of abundant natural resources.

In order to survive, they had to “lean out” their processes. They built smaller factories, which focused on quickly turning small amounts of raw materials into small amounts of physical products. Processing smaller batches allowed the manufacturers to reduce financial risk, while slowing generating sustainable levels of working capital.

The system that they used came to be known as just in time manufacturing, popularized in Western media as the Toyota Production System.

Supporting a JIT manufacturing system requires discipline, structure, and explicit processes. In addition to strictly limiting inventory, the following methods are included in a true JIT system:

• Housekeeping – physical organization and discipline
• Elimination of defects
• Setup reduction and flexible changeover approaches
• Small lot sizes
• Uniform plant load – leveling as a control mechanism
• Balanced flow – actively managing flow by limiting batch sizes
• Skill diversification – multi-functional workers
• Control by visibility – using visual tools to improve communication
• Designing for process
• Streamlining the movement of materials
• Cellular manufacturing
• Pull system
• Kanban

When done well, adopting a Lean manufacturing or just in time manufacturing system can have a drastic impact on an organization’s productivity, risk management, and operating costs. Here are just a few of the quantitative benefits experienced by manufacturers worldwide:

• Reduction in inventory
• Reduction in labor costs
• Reduction in space needed to operate
• Reduction in WIP (work in process)
• Increase in production
• Improvements in product quality (lower rates of defects)
• Reduction of throughput time
• Reduction of standard hours
• Increase in number of shipments

In general, companies employing JIT manufacturing practices enjoy reduced cycle times, faster times to market, and reduced operating costs, although there are some potential risks, especially for smaller organizations. In order to find success with JIT, it’s important to find suppliers that are close by, or that can supply materials quickly with limited advance notice. Sometimes, minimum order policies can pose a risk to smaller manufacturers who might order smaller quantities of materials.