Just in Time

1. Introduction

‘‘Just-in-Time’’ (JIT) means different things to different people. Some believe it to be an approach to manufacturing production, control and purchasing; to others it is a methodology to achieve manufacturing excellence (Schonberger, 1986); some businesses even view JIT as a winning strategy in the highly competitive market place of the 1990s (Schniederjans, 1992). As an operational philosophy JIT has been developing extensively in the manufacturing sectors, from its early development in Toyota Motor Co., to today’s wide spread employment.

However, the JIT philosophy is being increasingly and seriously questioned by some academics and practitioners. For example, the slow demand and simultaneous surge in inventories during the second quarter of 1994 was interpreted, by the Wall Street Journal as an end to the “wishful nature” of the JIT theory of production management (Norris, 1994).Roy Shapiro, Professor of Operations Management Harvard Business School, states that “companies run into trouble” when they stress “squeezing out the last iota of inventory” above the more important goals of quality and process improvement (Bleakley, 1994). Shapiro also notes that even firms in Japan, where JIT practices were first heavily developed, increased their inventory levels as they learned more about the inefficiencies of small order/lot quantities (Bleakley, 1994).

In the first part of this study, definition of Just-in-Time, how it works and its benefits are examined. The second part of this study is focused on the constraints and discussions regarding the benefits and successes of just-in-time practices.

2.1 What is Just in Time (JIT)?

According to Ventorline.com JIT is a management philosophy that strives to eliminate sources of manufacturing waste and cost by producing the right part in the right place at the right time. (World wide web)

2.2 How JIT works

For JIT to work, two things must happen:

(a) all parts, or orders must arrive when and where they are needed, in the exact quantity

that is needed.

(b) all parts, or orders delivered, must be usable.

Where these conditions are not achieved, JIT may easily become Just-too-Late.

In achieving these requirements, purchasing has the following responsibilities:

The emphasis should be on performance rather than design specification. Less restrictive specifications enable suppliers to be cost effective by being innovative with regards to the quality/function aspects of supplies. In JIT purchasing, value analysis is an integral part of the system and should include supplier liaison:

1. to ensure that they understand completely the necessity of maintaining a consistent lead time

and high level of quality,

2. to investigate possible or potential suppliers within a reasonable proximity to the users locality, to help increase the certainty of delivery lead time and on time delivery,

3. to establish long-term relationships with a view to meeting the supplier’s expectations in respect of:

(a) continuity of custom,

(b) a fair price and profit margin,

(c) procedures and price adjustments,

(d) minimising order changes,

(e) firm and reasonably stable specifications,

(f) smoothly timed order release,

(g) involvement in design specification,

(h) prompt payment.

2.3 The benefits of JIT

The potential benefits of JIT to an organization and its purchasing function in particular, have

been summarised by Schonberger and Ansari (1984) as:

(A) Parts costs Lowscrap costs; low inventory carrying cost.

(B) Quality Fast detection and correction of unsatisfactory quality and ultimate improved quality in purchased goods.

(C) Design Fast response to engineering/ operational change requirements.

(D) Administration efficiency Fewer suppliers, minimal expenditure and order release work, simplified communication and receiving activities.

(E)