Executive summary
Just-in-time is a method of running operations in an entity to ensure that they operate proficiently and leanly with an aim of minimizing waste and enhancing the quality of output. The system was developed and implemented in Japan in the 1970s. Some of the vital elements that need to be in place for the system to work are stable production, supple resources, the output of very high quality, and dependable suppliers among others. Finally, the system has been considered to be successful in Japan and the rest of the world. Some of the key benefits that have been achieved from the use of the system are a reduction in material handling cost and wastage, a reduction in labor cost and space requirements.
Definition of Just in Time
The concept of Just in Time (JIT) is a control mechanism for production and inventory system in which the materials required are purchased and units are manufactured only when needed to meet the actual customer demand (Vanderbeck and Mitchell 192). Therefore, it focuses on the purchase of the correct amount of raw materials and the production of the correct number of units. The concept of JIT was first developed in Japan in the 1970s by Taiichi Ohno. The founder came up with this system after visiting the US in 1956 to learn the system that was used by Henry Ford. The idea of JIT was borrowed from how commodities are arranged in a supermarket. In this system, each production line arranges its assorted output for the following line to select from.
The fundamental techniques used in Just-in-time
There are vital techniques that are required for JIT to work effectively. The techniques should ensure that there is stable production, supple resources, output of very high quality, and dependable suppliers among others. Further, the techniques can be grouped into two. The first group comprises of the plants and the systems. First, it is necessary to have a layout of the plant and demand pull production. The second system is Kaban. It gives information on when to restock (Rios-Mercado and Rios-Solis 314). It ensures continuous supply of inventory and products. Third system is a mechanism that will ensure self-review and continuous development of the system such as total quality management (Weygandt, Kieso and Kimmel 341). Some of the other important systems are material requirement planning and manufacturing resource planning. The second group requires organizations to have a strong association with stakeholders such as owners, management, government, labor unions, and supply chain (Hirano 141).
Is Just in Time a success in Japan?
JIT was developed in Japan in the 1970’s and it created an essential new method to manufacturing process. It has gone through trial and error process over several years. Despite being developed in Japan, the system has been successfully implemented outside Japan. Some of the benefits that have been reported from the use of JIT are an increase in output, efficient use of resources, involvement of workers in finding solutions to problems, improved relationship with all stakeholders, improved quality of products, less number of hours spent on machine set-ups, and a reduction of rework (Drury 241). A study carried out indicates that firms that implemented JIT reported a 70% decrease in inventory, a 50% decline of labor costs, and 80% drop in the amount of space needed. Despite the numerous benefits reported, the system has a number of limitations. For instance, its success highly depends on the reliability of suppliers. Also, it limits the ability of an organization to take advantage of price fluctuations (Bhimani et al. 291).
Works Cited
Bhimani, Alnoor, Charles Horngren, Srikant Datar, and George Forster. Management and Cost Accounting, England: Pearson Education Limited, 2008. Print.
Drury, Colin. Management and Cost Accounting, Boston, USA: Cengage Learning, 2008. Print.
Hirano, Hiroyuki. The Just-in-Time Production System, Florida: CRC Press, 2009. Print.
Rios-Mercado, Roger and Yasmin Rios-Solis. Just-in-Time Systems, New York: Springer, 2011. Print.
Vanderbeck, Edward, and Maria Mitchell. Principles of Cost Accounting, Boston, USA: Cengage Learning, 2015. Print.
Weygandt, Jerry, Donald Kieso, and Paul Kimmel. Managerial Accounting: Tools for Business Decision Making, London: John Wiley & Sons Ltd, 2010. Print.
