Introduction

Just-in-time (JIT) is easy to grasp conceptually everything happens just-in-time. For example

consider my journey to work this morning, I could have left my house, just-in-time to catch a bus
to the train station, just-in-time to catch the train, just-in-time to arrive at my office, just-in-
time to pick up my lecture notes, just-in-time to walk into this lecture theatre to start the lecture.
Conceptually there is no problem about this however achieving it in practice is likely to be
difficult!

In today's competitive world shorter product life cycles customer’s rapid demands and quickly
changing business environment is putting lot of pressures on manufacturers for quicker response
and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to
ensure quick turnaround is by holding inventory but inventory costs can easily become
prohibitive. A wiser approach is to make your production agile able to adapt to changing
customer demands. This can only be done by JUST IN TIME (JIT) philosophy. JIT is both a
philosophy and collection of management methods and techniques used to eliminate waste
(particularly inventory). Waste results from any activity that adds cost without adding value such
as moving and storing. Just-in-time (JIT) is a management philosophy that strives to eliminate
sources of such manufacturing waste by producing the right part in the right place at the right
time.

Features

JIT (also known as lean production or stockless production) should improve profits and return on
investment by reducing inventory levels (increasing the inventory turnover rate), reducing
variability, improving product quality, reducing production and delivery lead times, and reducing
other costs. The basic elements of JIT manufacturing are people involvement, plants, and system.
People involvement deal with maintaining a good support and agreement with the people
involved in the production. This is not only to reduce the time and effort of implementation of
JIT but also to minimize the chance of creating implementation problems. The plant itself also
has certain requirements that are needed to implement the JIT and those are plant layout, demand
pull production Kanban, self-inspection and continuous improvement. The plant layout mainly
focuses on maximizing working flexibility. It requires the use of multi-function workers

Demand pull production is where you produce when the order is received. This allows for better
management of quantity and time more appropriately. Kanban is a Japanese term for card or tag.
This is where special inventory and process information are written on the card. This helps in
tying and linking the process more efficiently. Self-inspection is where the workers on the line
inspect products as they move along this helps in catching mistakes immediately. Lastly
continuous improvement which is the most important concept of the JIT system. This simply
asks the organization to improve its productivity, service, operation, and customer service in an
on-going basis. In a JIT system, underutilized (excess) capacity is used instead of buffer
inventories to hedge against problems that may arise. The target of JIT is to speed up customer
response while minimizing inventories at the same time. Inventories help to response quickly to
changing customer demands, but inevitably cost money and increase the needed working capital.
JIT requires precision as the right parts must arrive "just-in-time" at the right position. It is used
primarily for high-volume repetitive flow manufacturing processes.

HISTORY
The technique was first used by the Ford Motor Company as described explicitly by Henry
Ford's.

The technique was subsequently adopted and publicized by Toyota Motor Corporation of Japan
as part of its Toyota Production System (TPS). Japanese corporations could afford large amounts
of land to warehouse finished products and parts. Before the 1950s this was thought to be a
disadvantage because it reduced the economic lot size. The undesirable result was poor return on
investment for a factory. Also at that time Japanese companies had a bad reputation as far as
quality of manufacturing and car manufacturing in particular was concerned. One motivated
reason for developing JIT and some other better production techniques was that after World War
II Japanese people had a very strong incentive to develop a good manufacturing technique which
would help them rebuild their economy. They also had a strong working ethic which was
concentrated on work rather than on leisure and this kind of motivation was what drove Japanese
economy to succeed. Therefore Japan’s wish to improve the quality of its production led to the
worldwide launch of JIT method of inventory Toyota Motors

The basic elements of JIT were developed by Toyota in the 1950's, and became known as the
Toyota Production System (TPS).The chief engineer Taiichi Ohno, a former shop manager and
eventually vice president of Toyota Motor Company at Toyota in the 1950s examined
accounting assumptions and realized that another method was possible. The factory could be
made more flexible reducing the overhead costs of retooling and reducing the economic lot size
to the available warehouse space. Over a period of several years, Toyota engineers redesigned
car models for commonality of tooling for such production processes as paint-spraying and
welding. Toyota was one of the first to apply flexible robotic systems for these tasks. Some of
the changes were as simple as standardizing the whole sizes used to hang parts on hooks. Toyota
implemented a program called Single Minute Exchange of Die (SMED). With very simple
fixtures measurements were substituted for adjustments. Almost immediately die change times
fell to about half an hour. JIT was firmly in place in numerous Japanese plants by the early
1970's. JIT began to be adopted in the U.S. in the 1980's.

STANDARDIZATION
Where the supplies are standardized and the suppliers are trustable and close to the plant. As
there is little barrier inventory between the workstations, so the quality must be high and efforts
are made to prevent machine breakdowns. Those organizations that need to respond to customer
demands regularly this system is also being able to respond to changes in customer demands.

SOFTWARE
For JIT to work efficiently Supply Chain Planning software companies have in the mean time
extended Just-in-time manufacturing externally by demanding from their suppliers to deliver
inventory to the factory only when it's needed for assembly making JIT manufacturing ordering
and delivery processes even speedier more flexible and more efficient.
MULTI-FUNCTIONALITY
In JIT workers are multifunctional and are required to perform different tasks. Machines are also
multifunction and are arranged in small U-shaped work cells that enable parts to processed in a
continuous flow through the cell. Workers produce pars one at a time within cells and transport
those parts between cells in small lots.

The principle of JIT philosophy

 Total Quality Management
 Production Management
 Supplier Management
 Inventory Management
 Human Resource Management

JUST-IN-TIME TOTAL QUALITY MANAGEMENT

Quality within JIT manufacturing is necessary because without a quality program in JIT the JIT
will fail. Here we think about quality at the source and the Plan, Do, Check, Action with its
statistical process control. Just-In-Time Total Quality Management is the mean of market and
factory management within a humanistic environment of continuing improvement. Moreover it
means continuing improvement in social life and working life. When applied to the factory
Kaizen means continual improvement involving managers and workers alike. When it comes to
Total Quality Management Japans strong industrial reputation is well-known around the world.
Total quality control is the system which Japan has developed to implement Kaizen or
continuous improvement. The traditional description of Just-In-Time is a system for
manufacturing and supplying goods that are needed. There are several important tools that are
important for total quality management control but there are seven that are even more important.
These are check sheets, scatter diagrams, cause and effect diagram, pareto diagram, histogram
and control chart. When used properly, these seven tools will help the total quality management
system by eliminating defective products. Moreover, they will help in assisting to improve
productivity, complete tasks on time, eliminate waste, and reduce lead time and inventory cost.
Implementation of TQM in Toyota
One of the widely held opinions about Japanese firms high performance suggests that Japanese
employees organized in teams are making improvements in their own jobs through quality
circles or other initiatives such as a suggestion system. These kaizen (continuous
improvement) activities have been considered in the Western industrial world as a
principal factor in Japanese firms high product quality and productivity. Consequently it is
comprehendible that European and American automobile producers have tried to set in place
kaizen activities in order to assure high product quality, and if possible, to increase their
productivity, by involving workers in these activities. Consequently in contrast with the
stereotyped opinion about kaizen at Japanese firms there are two kinds of kaizen activities
at Toyota: kaizen made by the supervisory staff and engineers as their functions, and that
made by workers through the quality circles and suggestion system. The latter is well
known in the Western world as worker's voluntary activities that bring high quality while a
essential part of economic gains realized by kaizen — cost reduction and productivity
increase — comes from the former with regards to the cost management. This paper then aims to
explain the conventions in the kaizen activities organized under the cost management system at
Toyota Motor Co without neglecting of course the role of worker’s voluntary kaizen
activities.
There are four main element of kaizen which are followed by Toyota:

 Teamwork: Would administrators be able to share decision making with staff? There is
the whole issue of team building which requires and investment of time, money, and
effort from all the staff. Most of our administrators are trained as managers not leaders.
Teachers are trained as followers not leaders. Most faculties I have been a part of are very
good at being committee members but have insufficient training to be members of a
decision making team. Are teachers good at organizing students into learning teams? Are
parents involved in decision making?
 Personal Discipline: Do administration and staff have the personal discipline to be
consistent? Does everyone have to be told that education is for the rest of one’s life? Do
staff members have the goal of continuous improvement? Is there a program in place for
students to work on their own personal discipline?
  Improved Morale: Are staffs members valued as part of the team or do you notice
people hiding out in the classroom/office? Are there process improvement plans in place
to help teachers with instruction, discipline, and dealing with innovation? What about
improving the morale of the students isn’t that important also?
 Quality Circles: How unique it would be to truly work on improving the process of
education! Would staff be willing to work together on improvement of instruction? Is the
school seeking input from students and parents for school-wide improvement?

J-I-T Production Management

Just-in-time (JIT) is defined as “a philosophy of manufacturing based on planned elimination of

all waste and on continuous improvement of productivity”. It also has been described as an
approach with the objective of producing the right part in the right place at the right time. Waste
results from any activity that adds cost without adding value such as the unnecessary moving of
materials, the accumulation of excess inventory or the use of faulty production methods that
create products requiring subsequent rework.  JIT (also known as lean production or stockless
production) should improve profits and return on investment by reducing inventory levels,
reducing variability, improving product quality, reducing production and delivery lead times and
reducing other costs.

The basic elements of JIT were developed by Toyota in the 1950's and became known as the
Toyota Production System (TPS).  JIT was well-established in many Japanese factories by the
early 1970's.  JIT began to be adopted in the U.S. in the 1980's (General Electric was an early
adopter) and the JIT/lean concepts are now widely accepted and us

Toyota Production System

A production system that is steeped in the philosophy of the completed elimination of all the
waste and that imbues all aspect of production with this philosophy in pursuit of the most
efficient production method.
Kanban Production control System

In the TPS, a unique production control method called the “kanban system” plays an important
role. The kanban system has also been called the “super market” method because the idea behind
it was borrowed from super market. Super markets and mass merchandizing stores use product
card on which product related information such as product name, product code and storage
location is entered. A kanban or “pull” production control system uses simple visual signals to
control the movement of materials between work centers as well as the production of new
materials to fill those sent downstream to the next work center. Toyota employed kanban sign in
place of the cards for the in production processes the method came to call the kanban system. At
Toyota when a process goes to the preceding process to retrieve parts it uses a kanban to
communicate what parts have been used.

In Toyota’s dual-card kanban system, there are two main types of kanban

1. Production Kanban: signals the need to produce more parts

2. Withdrawal Kanban (also called a "move" or a "conveyance” kanban): signals the need to
withdraw parts from one work center and deliver them to the next work center.

A kanban system is referred to as a pull- system because the kanban is used to pull parts to the
next production stage only when they are needed.  In contrast an MRP system (or any schedule
based system) is a push system in which a detailed production schedule for each part is used to
push parts to the next production stage when scheduled.  Thus in a pull system material
movement occurs only when the work station needing more material asks for it to be sent, while
in a push system the station producing the material initiates its movement to the receiving station
assuming that it is needed because it was scheduled for production.  The weakness of a push
system (MRP) is that customer demand must be forecast and production lead times must be
estimated.  Bad guesses result in excess inventory and the longer the lead time the more room for
error.  The weakness of a pull system (kanban) is that following the JIT production philosophy is
essential especially concerning the elements of short setup times and small lot sizes because each
station in the process must be able to respond quickly to requests for more materials.

Dual-card Kanban Rules:

1. No parts are made unless there is a production kanban to authorize production.  If no

production kanban are in the “in box” at a work center, the process remains idle, and
workers perform other assigned activities. This rule enforces the “pull” nature of the
process control.
2. There is exactly one kanban per container.
3. Containers for each specific part are standardized, and they are always filled with the
same quantity.  (Think of an egg carton, always filled with exactly one dozen eggs.)

Decisions regarding the number of kanban at each stage of the process are carefully considered
because this number sets an upper bound on the work-in-process inventory at that stage. For
example if 10 containers holding 12 units each are used to move materials between two work
centers the maximum inventory possible is 120 units occurring only when all 10 containers are
full.  At this point, all kanban will be attached to full containers so no additional units will be
produced. This feature of a dual-card kanban system enables systematic productivity
improvement to take place.  

Toyota’s supplier management

A very important factor for Toyota’s success in applying their famous lean production concept is
their quite unique relationships. According to Toyota these relationships must be characterized
by the following four attributes to be considered acceptable
 Re-negotiations of contracts are never necessary

 Follow-ups after an order is placed are never necessary

 Administration and transaction cost are very low

 Quality monitoring of incoming deliveries is never necessary

Present some remarkable facts about Toyota’s way of achieving good results from suppliers and
summarize their extraordinary relationships. Toyota has a very strong position in its supply
chain. As a result it can more easily impose demands on suppliers than smaller companies. The
two benefits of that the cost of implementation of new concepts such as the cost of a zero defect
delivery performance is fully financed by Toyota’s suppliers themselves and Toyota has forced
their key suppliers to locate their production units within a radius of 30 kilometers around their
own plants. Toyota’s supplier relations can be characterized as a network rather than a sum of
independent relationships. Toyota holds minority shares of its key suppliers and also these
suppliers have substantial cross-holdings in each other. The suppliers are independent companies
with separate books, which make them real profit centers. Furthermore Toyota is exchanging
employees with their key suppliers on a regular basis for example to provide help if suppliers
have serious production problems. Toyota has built a network based on trust among its suppliers
which forces its suppliers to cooperate among each other. However this is only possible because
Toyota is able to ensure that each supplier will make a reasonable return on their investments.
Toyota is also able to guarantee their suppliers a steady volume of business. That way the
suppliers can minimize their inventory buffers and can utilize employees and machinery more
effectively than companies which are facing sudden changes in the volume and mix of orders at a
very short notice. All benefits that stem from innovations by suppliers alone are fully granted to
them. Toyota has also connected their information systems to enhance communication which
further improves efficiency. Their suppliers are usually involved in innovation processes at a
very early stage. Often half of the engineering hours are transferred to the first level suppliers. It
has become apparent that Toyota is very much relying on long-term relationship.

Supply Chain Management: Just In Time

Introduction

In the realm of supply chain management “Just in time” refers to an inventory strategy that it
used to improve a business’s return on investment through a reduction of in process inventory
and all related costs. Just in time is driven by a series of signals referred to as Kanban, which tell
production processes when it is necessary to make the next part.
Supply chain Management in Toyota
Toyota has shown superior result in term of cost, quality, and lead-time compared to its
competitor. This success has led to an extensive interest in the Toyota production system and
Toyota’s way of doing business. Toyota supply chain management explain how to achieve
balance of efficiency by focusing on

 Variety: Determining your variety of offering based on the operational efficiency and
market demand.
 Velocity: Maintain a steady flow through all processes of the supply chain.
 Variability: Manage inconsistencies carefully to reduce cost and improve quality.
 Visibility: Ensure the transparency of all processes to enable continuous learning and
improvement.