JIT in Supply chain management

Submitted by: Kuntay Karthik (011) T.Sumith Singh (029)

AIM of JIT: To create a Supply Chain which provides fast, reliable and flexible response to customer requirement at least cost and minimal dependence on inventory.

Provide fast, reliable and flexible response to customer requirement at least cost and minimal dependence on inventory not just within the confines of a single organization, but ultimately throughout the entire supply chain by creating a highly responsive organization which is devoid of any waste.

ORIGIN OF JIT:

Commenced at Toyota car plant in Japan and is thus known as Toyota Production System ( TPS)

A Japanese concept now widely used all over the

world

Also referred to as, Lean Manufacturing / Time

Based Manufacturing /Agile Manufacturing /

Toyota Production system ( TPS)

JIT- Some common misunderstandings:

Putting pressure on the suppliers / management of suppliers only Getting deliveries at the last moment Suppliers holding the stock for us JIT is applicable only in foreign countries like Japan Not practical in remote units

Not applicable to process industries

JIT

VS

Traditional Approach to Manufacturing

problem Unreliable machines Bottleneck areas Large lot sizes Long mfg.. lead times Poor Quality

JIT Solution Improved reliability Increase capacity Reduce set up times Pull system Improve process

Key Elements of JIT Philosophy:

Expose and Eliminate Fundamental Problems Reduce Manufacturing Throughput Time Improve Supplier Performance Improve Quality Improve Flexibility Create High Responsive Organization Eliminate Waste (Non Value Adding)

JIT Purchasing Features:

Preferably single source for each item Long term contacts Very short lead times Frequent deliveries of small lots 100% good quality Close interaction with supplier Proper delivery schedules and plans to supplier Local source as far as possible Training assistance in SQC, JIT & Technical Assistance Treat the supplier as CO-MAKER

JIT Effect on Material Ordering:

TRADITIONAL MFG
Order quantity is
determined by the

JIT MFG
Supply exactly meets
demand. Delivery is

Economic Order
Quantity

when required

JIT Effect on Purchasing: TRADITIONAL MFG

Large, Just In Case covers several weeks production Deliveries are not linked to manufacture and are in bulk. Relationship is adversarial Multiple suppliers. ST Agreements

JIT MFG
Small, IT For daily production Deliveries are synchronized with production Relationship is based on Co Maker principle. Single supplier. LT Agreements

JIT Supplier Selection Criteria:

Close to plant Quality product Good industrial relations Reduce total number of suppliers

Just In Time Approach means Challenge the Following:

Set up Time
Process Cycle Time

Batch Size
Planning System Material Handling In Short All Existing Practices !

Thank You