JUST IN TIME INVENTORY

PRESENTED BY
KARTHIK RAJA M
32321017
2ND YEAR MBA REGULAR
INVENTORY

Important assets that most businesses possess

Turnover of inventory is the primary sources of revenue generation and subsequent earnings for the company’s
shareholders/owners.

 Type of Inventory
 Raw material inventory
 Work in progress inventory
 Finished goods inventory
 Maintenance/repair/overhauling(MRO) supply.
TYPE OF COST ASSOCIATED WITH INVENTORY

Inventory Holding or Carrying Cost

Taxes, insurance and shrinkage related costs
Storage and handling costs
 Ordering Cost
 Carrying cost
DEFINITION

 Just-in-time (JIT) is an inventory strategy that strives to improve a business’s return on investment by reducing in-
process inventory and associated carrying costs.

 An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as
they are needed in the production process, thereby reducing inventory costs.

 Just-In-Time, commonly known as “Toyota Production System”
HOW JIT HELPS IN ANY ORGANIZATION?
JUST IN TIME EFFORTS

Cellular manufacturing
 Multi skilled workforce
 Kaizen/continuous improvement
 Set-up time reduction
 Small-lot sizing
 Stable production schedules
 Total productive maintenance (TPM)
 Total Quality management (TOM)
 Vendor development
 Kanban
 Standard containers
 Quality circle
REASON FOR JUST IN TIME EFFORTS

Simplifying stable production plan, or minimum variability

High volume repetitive manufacturing
Proximity of suppliers
Rising inventory level
 To gain competitive advantage in the market
MISSION OF THE JUST IN TIME

Elimination of in transit inventory

Elimination of in plant inventory
Elimination of unnecessary activities
Elimination of redundancy
Reduce inventory
 Reduce lot sizes
ADVANTAGES OF JIT

Less space required for stock

 Closer relationships with suppliers
 Reduced the cost of production
 Less vulnerability to fashion and technology changes
 Reduction in stockholding costs
 Increase in cash flow
 Reduce the wastage
DISADVANTAGES OF JIT

 Danger of lost sales

 High dependence on suppliers
 Less time for quality control on arrival of materials
 Increased ordering and admin costs
 May lose bulk-buying discounts
 It takes time to established
JI T IN TOYOTA

They produce 20000 cars per day

Two 8 hr shifts (separated by 4 hrs)
Daily schedule adherence @ 97%
Sheet steel to car, less than 16hrs
Average 6 hrs of component inventory
Delivery of components to plant organised by Toyota
 No incoming inspection
 As a general policy Toyota do not dual source
WORKER CHARACTERISTICS OF TOYOTA

 Employees are cross trained for flexibility and efficiency

 Toyota use unskilled workers, preferring to train them itself
 Improved communications facilitate the passing on of important information about the process.
 Toyota designed the factory to be 30 percent more compact than other factories with similar output, to curb
building and operating costs and enhance communication.
 Each Toyota employees has right to stop production line when defect occur
COMPANIES CURRENTLY USING JIT

Xerox
Harley Davidson
General Motors
Ford Motor Company
Manufacturing Magic
Hawthorne Management Consulting
 Strategy Manufacturing Inc.
 And Many more
Thank You
THANK YOU