St.

John College of Engineering and Management, Palghar

Subject: Production planning and control (Semester–VII)

Submitted by: Mr. VIKRAMPRATAP SINGH

Seminar on Topic:

JUST-IN-TIME (JIT) SYSTEM

Introduction
JIT SYSTEM

JUST-IN-TIME is a system which has universal existence. It can be applied to any field of
operations.it simply means right things at the right time.it is the manufacturing philosophy that
signifies the elimination of unnecessary activity or equipments that will add nothing to the quality.

Concept Of JIT System :

The concept of JIT was started in the 19th century by a Japanese company. Most successful
companies develop and I strategies that will give them competitive advantage. A company that
improve the performance on a regular and continuous basis certainly will gain the competitive edge.
Companies seek competitive advantage by emphasizing on performance factors such as flexibility,
quick responsiveness, costs, efficiency, quality, reliability and services.

Following points represent comparison between A,B and C Items.

Sr.No. A - Items B - Items C - Items

1. Strict control Moderate control Less control
2. No safety stock Low safety stock High safety stock

3. Ordering is frequent Order are less in number Ordering is bulk and non-
frequent
4. Stock record to be kept up-to-data No strict control No such computation
5. Value analysis is required Value analysis is May be done.
favourable

Procedure for ABC analysis :

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 (i) Calculate total inventory investment by multiplying unit cost with cost with number of unit
consumed.

(ii) Arrange all items in descending order of total inventory investment.

(iii) Computer cumulative total of number of items and their usage value obtained in above step.

(iv) Find percentage of cumulative value to total consumption.

(v) Plot a graph of % of items v/s value.

(vi) Include the items in group A in range of 0 to 75% cumulative %.

(vii) Include the items in group B in range of 75 to 90% cumulative %.

(viii) Remaining items are included in Group C.

Advantages :

(i) This will establish selective control and focuses on few items.

( ii ) This will reduce clerical cost and help in better planning.

( iii) Equal attention to all items is not economical and feasible. This will help to concentrate on
such items which are having high usage value.

Limitations :

(i) The analysis depends only on annual consumption value and does not rely on unit cost.

( ii ) some items irrespective of their consumption are important and may create bottlenecks. This
may result suddenly and no provisions are made in this regard in above category.

( iii ) The result of ABC analysis should be reviewed periodically and updated regularly.

Sr. No. Characteristics A-Items B-Items C-Items

1. Degree of control Tightest possible Normal control Simple possible

Control involving good controls, low priority
records and regular in scheduling in
attention factory

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2. Types of inventory Most accurate and Normal goods records No records or only the
records complete simplest way

3. Priority High priority in all Normal processing Lowest priority

activities to reduce with high priority only
lead time and when critical
inventory

4. Ordering procedure Careful, accurate Good analysis for No EOQ or order

determination of order EOQ and order point point calculation are
quantities and order determination and required.
points may be viewed when
major occur.
Characteristics of ABC analysis