A JIT operation maintains only the required inventory in demand. Previous year's sales statistics dictate how much product to keep on hand, allowing the use of excess capital elsewhere. Just in time is a fully automated system that monitors inventory levels and places orders accordingly. This feature ensures a company sustains the right amount of product on hand.
Information about just-in-time management includes some drawbacks. Generally, single suppliers participate in JIT operations. Therefore, an interruption in supply, costs your company profits and customer goodwill. In addition, company expenses increase when suppliers pass shortage costs on to their clients. Such expenses negate the savings JIT scheduling provides. Avoid these expenses by manufacturing in-house, owning the manufacturer or investigating your supplier's integrity and service record.
Implementing a JIT system provides your company with the following benefits:
- Just-in-time manufacturing reduces inventory, storage, depreciation and shipping costs.
- Product quality increases with just-in-time materials. JIT planning eliminates the burden of products becoming obsolete while sitting on the shelf.
- A JIT solution improves efficiency. It redistributes space, processes and funds previously designated for inventory.
- JIT management creates a better customer experience. With this system in place, customers receive the highest quality products when they need it.
Determine your software and process converting partners for implementing JIT managementConverting your existing inventory process to just-in-time management is not a do-it-yourself project. JIT uses a few software systems to maintain inventory counts. Companies often use Kanban, E-Kanban or material requirements planning (MRP). A Kanban or "pull" production control system manually controls the movement of materials between work centers using cards for requesting small products. More technologically designed, E-Kanban is an electronic version of Kanban. E-Kanban eliminates the manual pitfalls of its predecessor and determines inventory replenishment times.
Incorporate trustworthy product resources for successful just-in-time managementDependable product resources build the foundation of any JIT process. Find JIT participating suppliers to pull the operation together. Also, select a product organization system to monitor inventory.
Get information about just-in-time managementBefore you adopt this style of inventory management, get the scoop from JIT articles and blogs.
- Just-in-time manufacturing provides more benefits than obstacles for maintaining your inventory business. It reduces waste, optimizes efficiency and cuts costs related to storing, managing and shipping inventory.
- Having a surplus of products is not the key to greater customer satisfaction. JIT allows your company to provide the most innovative products to your customers when they need them.