Set Ground For Effective Just-In-Time Inventory Management

Just-in-time (JIT) system could offer a competitive edge to your business and help you survive in a competitive market. Lean production systems utilize JIT method, and have fewer workers, less time wastage, and minimum machine breakdowns. To achieve fewer inventories, you must precisely time the arrival of components and sourcing of services.

Just-in-time manufacturing (JIT) is a production method used by the manufacturer to reduce number of components stored as inventory. The components may form part of the large product such as car parts. In JIT, the flow of components and the delivery times are precisely timed so that small batches arrive just as the other batch is completed - hence the name "just-in-time".

How Toyota Implemented Just-In-Time

Toyota Motor Company of Japan first used JIT, which was perfected by Taiichi Ohno, together with his co-workers. The development of the method was out of necessity, since Japan has stiff competition for the few resources, and the country's culture does not encourage wastage.

The system has led to reduced costs at the factory, and continuous training of workers has made them capable of handling many tasks. Some earlier features of Just-in-time manufacturing were used at Henry's Ford factory in Rouge, where a glass factory was constructed beside the main company to bring down inventory costs.

The success at Toyota proves that once manufacturers use inventory management, they can free up space, and reduce costs associated with holding up production components.

What are Some Goals of Just-In-Time?

The primary goal of just-in-time manufacturing is to achieve seamless movement of materials through the production line and to reduce the manufacturing time.

To achieve the primary goals, there must be:

1) Minimum Disturbances

Disturbances that affect the movement of goods through the production process should be minimised. They include damaged or defective inputs, machine breakdowns and disruptions of production schedules or late arrivals of items from suppliers.

2) An Adaptable System

System must adapt fast enough to handle changes in the product designs and handle the high output demands.

3) Shorter Setups

The system you use must handle adjustments quickly. Slow set-up of machines can negatively impact your ability to produce without interruptions. Toyota, for instance, used to change a mould in 3 hours during the 1940s and now it's done in less than 3 minutes.

4) Minimum Inventory

Your ultimate aim should be minimizing storage of production inputs. Use inventory management software to analyze your stock supply and inventory movements, free up space that is expensive and cut many other hidden inventory costs.

5) Minimum Waste

Wastes, such as reworks, are idle resources that limit the effectiveness of Just-in-time manufacturing. Types of wastes that affect the production are; time wastage by employees, unnecessary handling, traditional works methods, overproduction and scraps or final products with substantial defects.

Features of An Effective Just-in-time Manufacturing System

To realize the goals of minimizing wastes, inventories, and time; the whole factory must work together in the following areas:

1) Product and Process Design

Best way to ensure the success of setting up Just-in-time system is to use an inventory management software which allows you to maintain a minimum level of stock.

Design of an efficient JIT system is the first step towards seamless manufacturing and inventory management. Products should have fewer components and use standard parts that make them simple to construct. The final quality should be considered to minimize reworks since poor-quality items must first be corrected.

Process design must complement the design of the outputs. The plan for the process must allow for sourcing of fewer lots, which is insured inventory management. Machines should be up and running in the shortest setup time. You also need the equipment to allow for ease of changes such as the weight and shape of the final product. Ideally, the machines should be capable of serving more than one purpose, and this ensures you the business can adapt to changing consumer needs. In process design, automating certain parts of the line reduces defects.

2) Workforce

The people working in the company need more training that ensures flexibility and prevents delay when someone is home on sick leave. In addition to training, the company should continuously improve the workers quality management skills and promote the culture of just-in-time manufacturing, which is a way of thinking and doing things. An open environment that allows for communication between subordinates and management is essential.

3) Control and Planning

In planning and oversight there are several ways of managing activities in the factory. The most notable systems are the push system, where work is pushed to the next stage after being completed at one stage, and pull system where the "pull" to manufacture comes from the demands of the final consumer.

Advantages of Just-In-Time

It can decrease your costs due to effective inventory management.
You enjoy few damages through the design of process and high-quality standards of products.
Offers flexibility where the business can adapt to changing consumer needs and the company can handle weak demands in the market.
Ease of introducing new products since the machines are highly adaptable and versatile.
The launch of improved product due to continuous improvement of product, process design and training of staff.

Disadvantages

Risk of delays when dealing with non-local suppliers.
More planning: With inventory management software the process of planning has become automated, so this is a disadvantage faced by those relying on old methods.
Risk of running out of stock: Sometimes suppliers may face machine breakdowns or lack of raw material, and this creates unforeseen risk.

Most people rely on Excel which is ineffective and lacks specialised features to handle the demands of JIT, in comparison to inventory management software which purpose is to help you keep everything organised and on track. Frequent errors in your inventory tracking are just one of 5 big signs you need to stop using Excel for inventory management.

Best way to ensure the success of setting up JIT system is to use an inventory management software which allows you to maintain a minimum level of stock. This way you will never have to worry about running out of stock. JIT can only be executed if you exercise planning and control of the inventory and the production.