Manufacturing within companies have evolved over several years and Toyota has been one of the key players to revolutionize manufacturing through adopting just-in-time (JIT) as part of their lean manufacturing system. The methodology of this generally customed to minimize and decrease the production timeline and only produce what is required by the customer. This system began in the 1960s in Japan and was later followed by western industries in the 1980s. It is now used widely across various industries around the globe.
JIT is an effective system to bring improvements in profitability of a manufacturing site as inventory is ordered and delivered only when it is needed, instead of keeping items in stock. The more inventory that is kept, the more it contributes waste of resources and should be minimized to increase profits. There are many benefits to JIT techniques such as low inventory, less wastage, free up cash resources and increased quality production.
In two environments where it has proved to be very successful is manufacturing and retail. For the manufacturing processes, then it relies on a sequence of signboards, also known as Kanban. These are used within the manufacturing process to signal when to manufacture next product. During this system, the moving of raw materials from one place to another are reduced and as a result so are the costs.
However, in a retail setting, the JIT process is used to make strong link with suppliers and retailers in such a way that it optimise their relationship and movement of goods. The interrelationship between production, sales, and inventory levels can simply be tracked and maintain by self-order taking systems. This will reduce the number of products that are unavailable in store. In both cases, it is all about only stocking or requesting raw materials when required. This saves costs to and fulfills customers’ requirements more effectively.
Just in Time Manufacturing Examples
JIT method examples can be found in several industries, but especially for those who utilize a production line. Below are some most successful examples where JIT has been used.
Toyota is one of the most well-known examples of JIT manufacturing as it was Toyota who first adopted this strategy. At Toyota the raw materials are not moved to a workstation until the order is made by the customer and the product is confirmed to be built. This way, inventory amounts are kept to a minimum which as a result lower the costs.
Additionally, then this system ensures Toyota can adapt quickly to their customers’ needs without maintaining more than required inventory which lowers its waste. Some other factors contributing to Toyota’s profits are the smaller amount of raw materials required to be stored at different locations, ensuring that there is always just enough material to begin production, and once the product has been made then parts or materials are replenished.
Dell is another great one of the just in time manufacturing examples that has successfully demonstrated effectiveness of the JIT process.
They achieve this by having dialogue with suppliers who maintain some level of inventory instead of themselves. This way, parts can be ordered with shorter lead times, making it easier for Dell to assemble and dispatch to customers. Their process is seen successful because of their reliable suppliers and the short lead times.
In case of this company, then there was a significant change after World War II. Following on from there and experiencing less efficient processes, they shifted to JIT manufacturing.
By Implementation of the JIT process at Harley Davison, the inventory level was reduced to 75% and at the same time production level increased. This way they were able to solve the inefficiencies in the process related to high amount of expensive inventory.
Fast food stores like McDonald’s often have everything they require to assemble and do not cook further until the next order is received. This method makes the process highly standardized and as a result the customers are experiencing the same level of service every time.