Just reduce waste by getting merchandise when required

Just in Time (JIT) is a stock system control
organizations utilize to expand productivity and reduce waste by getting
merchandise when required in the production process; this way lessening stock
expenses. This method expects producers to estimate request precisely (Benton Jr, 2013, p.29).  Fewer
inventories on hand means the company gets to pay less in storage and insurance
costs. JIT also requires less cash in the short term (Thomas et al, 1997).

JIT inventory system was first
introduced by the Ford Motor
Company. Henry Ford’s My Life and Work- “we buy for immediate needs and only to
fit into production plan. We make arrangements for raw materials to be
purchased and delivered on schedule”. The Ford Company adopted this technique
which saved a huge amount of money, decrease in obsolete materials and rapid
turnover .Toyota and since has been embraced by
other car makers. The framework is carried out by booking/ requesting and
delivering of parts; which are delivered as required in the generation procedure
(Monden 2011, pp8-9). For instance,
if a car’s windshield is set up on Tuesday and engine on Wednesday, at that
point those particular parts are not delivered by the organization’s provider
until just before those individual days().

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JIT serves to maximize organizations
efficiency, utilize resources and reduce wastes as well as costs. Costs are
reduced from overproduction- the right amount of product is produced. Time-
right amount of time would be take to produce the specific product, where
quality would be assured. There wouldn’t be unnecessary movement of stock or job saving transportation
costs. Less obsolete stock and machinery lasts longer as there wouldn’t be excessive use of them (Benton Jr, 2013, p.129).

Efficiency is obtained through the increase of
productivity and decrease of cost. JIT allows employees to focus on one
production; meaning focus would be solely on product allowing for less time
spent on inspection, movement, queuing and storage. Quality assurance would be
established as production would be of highest quality (Aycock, 2003).

For JIT to be achieved, processes have to be set in place
for organizations, such as; Pull system, Close vendor etc

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The idea of pull system means organizations react to the demand,
or request, of the customer (or market). Producers respond by designing their
operations to react to the constantly changing necessities of clients. Those
ready to create to the demand of clients don’t have to manufacture merchandise that
conventional batch and queue makers must depend on. Delivery arrangements of
products to clients is less troublesome, and request turns out to be more
steady if clients believe in realizing that they can get what they need when
they need it (Monden 2011, p.35).

Organizations using JIT production
usually establish a good and close relationship with their suppliers. These
suppliers are required to supply quality materials on a frequent basis. Organizations
work closely with providers to help them understand the favored quality levels
and to urge them to provide more dependable, durable and high quality merchandise
(Chen & Paulraj, 2004). Organizations
thrive to have reliable suppliers in order to be able to rely on their quality;
therefore repeat purchasing from clients to organization and organization to
suppliers (Harrison, 1992).

Suppliers
likewise must be wiling and ready to transport in little quantities all the
time. Generally, sellers themselves will work under JIT frameworks. A seller is
probably going to have a few unique clients, some still adopting the traditional
way of operating and others, JIT (Hay,
1988). Under JIT obtaining, great provider connections are exceptionally
huge. Clients take measures to limit their arrangements of sellers,
concentrating on keeping up close working associations with a couple of good
ones. Because of the requirement for repeated, small deliveries, a great deal
of purchasers attempt to look for nearby providers to reduce the lead time for
deliveries and to diminish lead time variability. JIT purchasing is enhanced by
long term connections amongst clients and providers. Providers are all the more
ready to give resources to organizations that frequently purchase from them. Also
more willing to provide on credit (Ansari
& Modarress, 1990).

 

 

 

 

 

 

 

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A few factors, nonetheless, make JIT
system a precarious recommendation. A key worry here is the degree to which
firms are reliant upon specific providers. For instance, if a firm were to
commission a very restrictive item to a solitary provider (single providers
being normal in JIT), a JIT stock framework would put such a firm at a
significantly higher danger of sham for the benefit of the provider on the
grounds that the firm would have no prompt material to support an interference
of supply. Such an intrusion of supply may be costly to the point that the firm
may very well enable the provider to raise the cost (Chopra & Sodhi, 2004, p53).

Another risk could be supplier not able satisfy
a company’s requests. This may be due to internal issues such as work strikes. Suppliers’
workers could withhold labor, again prompting an interference of the company’s
supply. In any case, internal issues can mean a number of issues that keep an
association’s provider from providing. The fact of the matter is that by encouraging
the connection between organizations, JIT system builds the hazard that issues
or disappointments toward one side of the chain may be felt on another end (Bryan, 2002, pp17-28)

However, this risks, to some extent may
be avoided.

The use of technology lessens an organizations
ordering, carrying and storage costs. It enables the organization to make and
approve of purchase orders, update stock records, and pay for stock electronically
(). Additionally, using technology also enables many organizations to have
access to records of products instantly, anytime and anywhere; this reduces the
amount of hours for staffs to spend checking on stock. Less staff hours mean
less cost (Kannan & Tan, 2005, pp.
153-162).

JIT framework requires a comprehension
of objectives, targets and goals of the organization. After the objectives are
set up, the aim towards achieving overall goal is to start by figuring out what
is required to meet those targets (Schniederjans,
1993). The objective of a JIT approach is to build up a framework that
enables organizations to have just the materials, hardware and individuals required
to get the job done.

Since each assembling procedure is
unique, it is up to the individual organization to decide the level of approach
and the application of JIT. Be that as it may, it is vital to characterize the
arrangement and targets before setting up a JIT producing framework. It is
difficult to build up another JIT framework that can be utilized effectively
without change. Accordingly, genuine thought and consideration should be taken
in order to make an arrangement for Just-In-Time, which will profit overall
performance.