Implementation of JIT Concept

The implementation of the JIT concept as a process which must be taken

seriously. How a company will implement the JIT concept depends on many factors.
For example, if a company has more than 100,000 workers and production in
different places, then the implementation of JIT needs to be done in interaction with
all departments. It is obvious that for large companies more time will be spent. On the
other hand, smaller companies have the opportunity to implement the JIT concept
much faster because their organisation structure is not so complicated.
There are several general guideline steps for easier JIT implementation. The
following algorithm shows what the company has to do if it wants to implement the
JIT concept.

First of all, top management must accept idea of the JIT. They are responsible for
ensuring financial resources for the project. The most difficult thing for engineers is
to convince managers that the company under consideration really needs
implementation of the JIT concept in order to improve business processes.
Convincing managers to allow evaluation of JIT is not only a problem that comes
from human. Second step for a company is success which is connected with the fact
that employees also have to understand significance of the new concept. In this step,
it is important to explain to workers that JIT is not something bad and not something
unimportant for their work. It is desirable to hold a series of training session to
familiarize employees with the fundamentals of the JIT concept.
When they succeed once to explain to the human resources the importance of the
new concept and if they become cognizant about it, now it is possible to continue to
the next step. The third step would be the setup of ERP (Enterprise Resource
Planning). ERP is a system which integrates all data and processes of an organization
into a single unified system. It is impossible nowadays to run successful production
without strong support of an imformation system. It means that ERP requests the
software and hardware systems with a secure and huge database which is able to
collect all information about resources. With a centralized database, it is much easier
to manage all enterprise resources. It is especially important for logistics because
logistics can be consideres as a tool for getting resources, like products, services, and
people, where they are needed and when they are desired.
The next step after the ERP system is well established is test the system of the
organization. Now all preconditions of the implementation are considered and in this
step, organization must ensure that the system is ready for JIT implementation.
The technical and physical parts of the implementation, the most important thing
which is worth of mentioning is that during the process the organization must not
rush.
The last step is testing and control. For successful existence and developing of the
JIT system there must be continuous control. Without control, things can sway from
the right direction. Of course, feedback loops also exist and they are very important
for the whole process.
The Key Elements
There are three key elements essential to the successful implementation of
a JIT inventory system. These elements include people, plants and systems.
The people component relates to the need for all employees and suppliers
to be fully committed to JIT. In order for a JIT system to be implemented properly
there must be support for this system from all levels in the corporation. Acquiring
the commitment of all employees will minimize the chance of implementation
problems and conflict with management, and result in a smooth and timely
transition to a JIT system.
In a factory, plant or any other production environment the structural
layout plays an important role in the efficiency of the corporation. The layout
must be conducive to employee and production flexibility. The production
facility must also be able to react in a timely manner and produce orders when
received. In addition, management must keep accurate records of orders and
inventory levels in an accessible database to ensure that the appropriate quantity
of goods is being produced and supply levels reflect the orders on hand.
Another key component to maximizing production efficiency is regular
maintenance and inspections of machinery by employees. These inspections will
assist in identifying opportunities for improvement, calibration issues, and reasons
for product defects. One of the fundamentals elements of a successful JIT system
is continuous improvement. Once a factory or plant is built management and
employees alike should continuously be looking for incremental opportunities to
improve production efficiency.
When we talk about systems in a JIT setting, we are talking about “the
technology and process that links all levels of the production and corporate
function”. There are two major types of systems, material requirement planning
and manufacturing resource planning. Material requirement planning involves the
development of a production plan and related schedules. The production plan is
the management and planning of resources. The outcome of a production plan is
the master production schedule. This schedule identifies which products to
produce and when they will be produced.
By combining the efforts and efficiencies of these three key elements, a
corporation is able to realize the primary goals of a JIT system. Theses goals
include reducing operating costs, achieved by minimizing inventory levels, and
reducing lead times. By successfully implementing stringent quality control
procedures, corporations can improve product quality as a result of reducing the
number of defective goods. In turn, by reducing the number of defective goods, a
company can minimize unnecessary waste and the related costs associated with
write-offs.