August 2014 1

Introduction

Inventory strategy to increase efficiency and decrease waste

Reducing in-process inventory and associated carrying costs

Items are created to meet demand, not created in surplus or in
advance of need

August 2014 2

Centers on the elimination of waste - from raw material to
shipping

Production of the minimum number of units, which eliminates
the need for inventory

Production strategy to improve a business' return on investment

August 2014 3
Introduction
History
Origin : JAPAN

Initially known as : Toyota Production System

Taiichi Ohno : father/originator of JIT

Scenario After Second world war
Taiichi Ohno Examined American
Industry.

Devised a new system based
on elimination of waste.

August 2014 4
Elements

Flexible resources
Cellular layouts
Pull production system
Small-lot production
Quick setups
Uniform production
Quality at the source
Supplier networks

August 2014 5
JIT implementation design

Design Flow Process
Total Quality Control
Stabilize Schedule
Kanban Pull System
Work with Vendors
Work with Vendors
Improve Product Design
August 2014 6
JIT across organizations


August 2014 7
Advantages

Reduced Setup time.
Funds tied up in inventories can be used elsewhere.
Storage area used up can be utilized.
Production scheduling and work hour consistency is
synchronized with demand.
Supplies come in regular intervals throughout the production
day.
Risk of inventory breaking/expiring is reduced largely.
Inventory flow becomes simpler and easier to manage.



August 2014 8
Disadvantages

It makes re-working very difficult in practice, as inventory is kept
to a bare minimum.

There is a high reliance on suppliers.

Organization would not be able to meet an unexpected
increase in orders.

A natural disaster could interfere with the flow of goods to the
company from suppliers, which could halt production almost at
once.

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August 2014 10