An example of the Just In Time production strategy is to picture an automotive manufacturer that does not have high levels of inventory and who relies on the main supplier to contribute the necessary parts to build a car. The parts come “just in time” since they do not arrive prior or following the time in which they are necessary.
It can also be imagined as the antithesis to “just in case”, which causes producers to stock up on inventory in expectation of an increase of demands. Just In Time typically relies on sight to determine when pieces or goods are needed. This can be achieved by noticing that a required part is missing or will be necessary in the near future in order to complete the manufacturing process.
When it comes to the Just In Time strategy, a certain number of orders is only restocked when all the items have been used, or a certain level has been reached. There is never an abundance of goods or parts, which is great for those that have limited storage space as well as funding. It can be beneficial to the company due to higher return and profit of the investment.
There are some on-going discussions about who invented the JIT approach. Was is it Toyota or Ford? Published reports cite that- both have given credits to each other and also collaborated working on JIT approach development. JIT approach has been first implemented by the automobile sector in the 1970’s, based on ideas that were already in use by other manufacturers. Henry Ford’s company also worked on the same principal and found that this method made his process smoother and allowed for higher and quicker turn over, as well as cut costs on excess materials.
When Toyota started to use Just In Time, they found that as long as they were able to evaluate where the flaws were, that they could actually end up building cars at faster pace and at least cost. This fostered their idea of having cars that were built to order, so there would be no potential loss if the car did not sell and eliminated risk entirely.
They also found that they were able to rely on certain suppliers instead of multiple ones, which ended up having an effect on consistent quality and significantly reduced the need for quality checks.
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