Just in Time by Aguila and Montebon

(JIT)
JUST - IN -
TIME
Presented by:
Montebon, Desirie Joy M.
& Kyle V. Aguila
TABLE OF CONTENT
1 INTRODUCTION
2 HISTORY OF JIT
3 CHARACTERISTICS
4 BENEFITS
5 MAJOR RISK
INTRODUCTION
JIT is a production system also known as pull-it-through or

demand-pull system approach, in which materials are purchased
only as needed to meet actual customer demand.
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Just-in-time (JIT) inventory control reduces the amount of inventory
that a company maintains. The concept is based on a cluster of lean
manufacturing activities that are designed to only manufacture enough
products to meet customer demand. This control system does so by
pulling demand through a production facility, where each step in the
production process is only authorized to produce a limited amount of
inventory.
Thus, just-in-time inventory control is a set of systems that are

designed to squeeze a large amount of inventory out of a company. The
weak spot of inventory control is any possible fluctuations in just-in-
time deliveries; if they are interrupted, then a company has no
inventory buffer, and so must shut down its production operations.
Thus, a considerable amount of supply chain management is needed to
make just-in-time inventory control work properly.
BRIEF HISTORY
JIT is a Japanese management philosophy that has been
applied in practice since the early 1970s in many Japanese
manufacturing companies.
It was first developed and perfected within the Toyota
manufacturing plants by Taiichi Ono who is frequently
referred to as the Father of JIT (1912-1990).
Evolved in Japan after World War III, as a result of their
diminishing market share in the auto industry.
Toyota Motor Company – first to implement a fully functioning
and successful JIT system in the 1970s.
THE 4 CHARACTERISTICS OF
JIT ARE:
1.) Elimination of all activities that do not add
value to the product or service.
2.) Commitment to a high level of quality.
3.) Commitment to continuous improvement in

the efficiency of an activity.
4.) Emphasis on simplifications and increased
visibility to identify activities that do not add
value.
BENEFITS OF JIT
Reduce waste - a JIT strategy eliminates overproduction which
happens when the supply of an item in the market exceeds the
demand and leads to an accumulation of unsellable inventories,
these unsellable products turn into inventory dead stock which
increases waste and some inventory space.
Decrease warehouse holding cost - warehousing is expensive,

and excess inventory can double company’s holding cost. In JIT
system, the warehouse holding cost are kept to a minimum
because your order only when your customer places an order.
Your items already sold before it reaches you so there is no need
to store your items for so long.
BENEFITS OF JIT
Give the manufacturer more control - in JIT model, the manufacturer
has complete control over the manufacturing process which works on
demand pool basis. They can respond to customers needs by quickly
increasing the production for an in-demand product and reducing the
production for slow moving items. This means JIT model is flexible and
able to cater to ever changing.
Local sourcing - since JIT requires you to start manufacturing only when
an order is places, you need to source your raw materials locally as it will
be delivered to your unit much earlier , also local sourcing reduces the
transportation time and cost which is involved. This in turn provides the
need for many complementary business to run in parallel thereby,
improving the employment rates in that particular demographic.
BENEFITS OF JIT
Smaller investments - the JIT models use the right first-time
concept whose meaning is to carry out activities right the first time
when its done. Thereby reducing inspection and rework cost, this
requires less amount of investment for the company, less money
reinvested for redifying errors and more profit generated out of
selling an item.
MAJOR RISKS:
Unreliable suppliers - a supplier that does not deliver goods to
the company exactly on time and in correct amount could
seriously impact the whole production process.
Unexpected demand surge - a company may not be able to

immediately meet their requirements of a massive and
unexpected orders since few or no stock of finished goods.
MAJOR RISKS:
Costly Technology - an investment should be made in
information technology to link the computer systems of the
company and its suppliers so that they can coordinate the delivery
of parts and materials, sometimes those technologies can be
expensive and difficult to implement
Natural Disasters - a natural disaster could interface with the

flow of goods to the company from suppliers which could halt
production almost at once. If there is a natural disaster that slows
production or transportation times there will be it in the company
waiting for these products to arrive.

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(JIT)

JIT is a production system also known as pull-it-through or

Thus, just-in-time inventory control is a set of systems that are

2.) Commitment to a high level of quality.

3.) Commitment to continuous improvement in

Decrease warehouse holding cost - warehousing is expensive,

Unexpected demand surge - a company may not be able to

Natural Disasters - a natural disaster could interface with the

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