The comprehensive guide to just-in-time manufacturing
JIT manufacturing is using the resources at your disposal to their maximum potential, while eliminating all waste in the process. It originates from a Japanese management philosophy already applied in multiple manufacturing industries.
Main benefits of JIT
The benefits of applying JIT manufacturing principles in your company are:
Reducing lead time within production systems
Shortened response times from suppliers
Shortened response times to customers
Cutting down on electricity, water, and materials costs that just don’t seem to stop soaring
Once you’ve read the basics of JIT, you’ll have a better understanding of this type of manufacturing and how to implement it.
Three ways to describe just-in-time in manufacturing
Commonly known as a philosophy originating from Toyota production, just-in-time manufacturing is sometimes also described as an environment and control technique.
Now, you might be asking yourself: “How can a manufacturing practice be an environment, philosophy, and technique?”
Let’s dissect the question into three puzzle pieces.
Just-in-time manufacturing as a philosophy
JIT philosophy initially referred to the production of goods to meet exact customer demands just in time. In this scenario, the customer could mean the final buyer of the product or a manufacturing process along the production line. Currently, JIT manufacturing is commonly interpreted as production or manufacturing with minimal waste — including time, resources, and materials.
Just-in-time manufacturing as an environment
A JIT environment is established by the previously mentioned philosophy since JIT mandates that you manufacture products efficiently and keep an eye on every production process. Some key elements in this environment are repetitive manufacturing, total quality management, employee engagement, and healthy supplier partnerships.
Just-in-time manufacturing as a control technique
Employees are equipped with just-in-time control methods in their daily operations if JIT manufacturing is implemented at their company. The characteristics of a JIT control technique include:
A pull system
Production card usage
A synchronized production center
Get total inventory control
Thousands of manufacturers use Katana to get a live look at their material and product stock levels, set up reorder points, and automate production planning.
Since the early 1970s, JIT has been applied in manufacturing across the globe, but it originated from Japanese manufacturing businesses. JIT is said to have been developed and perfected within Toyota’s car making plants by Taiichi Ohno as Toyota was on the hunt for new methods to help them meet customer demands without delays.
As Taiichi Ohno and Japanese manufacturers proved that the JIT philosophy could work, it was adopted in other countries. Especially after the 1973 oil embargo, which led to shortened fossil resources across the globe.
Toyota’s case study was backed by examples from Japanese shipyards, which used JIT to reduce inventory levels. Other companies saw how Toyota and Japanese shipyards, partially due to JIT manufacturing, survived the oil crisis. Toyota and shipyards both managed to figure out a way to engage with every employee during the crisis and streamline their manufacturing processes for maximum output. Toyota’s production evolved from a curious test into an exemplary success case in only a few years.
How does JIT manufacturing work?
JIT manufacturing embodies a demand-pull system instead of the traditional “push” system. Every manufacturing operation produces only what is required to satisfy the demand of the following processes. Details and raw materials arrive in the manufacturing plant on time and are effectively used in production.
Here’s a neat graph to explain JIT manufacturing visually.
Subway (the sandwich maker, not the NY Metro) is a great real-life example of how a pull-based system works in a different type of industry.
What happens at a Subway when a client orders a cheese sandwich?
The sandwich maker fetches the bread and starts to make you a cheese sandwich. The shift manager keeps an eye on the ingredients for making sandwiches and orders more cheese or tomatoes when they see the inventory levels dropping too low. The customer’s purchase is a trigger for pulling new materials through Subway’s system.
In a push-based system, the shift manager estimates how many sandwiches they need for any given week or month, using data from past sales and seasonal performance. Then they calculate roughly what type of inventory needs to be ordered in advance.
What is the difference between lean manufacturing and JIT manufacturing?
JIT manufacturing often reminds managers of lean manufacturing, and the terms are sometimes synonymous. However, you should be wary of the nuances that differentiate them.
Lean manufacturing is a production strategy that focuses on reducing waste. Like JIT, lean manufacturing seeks to produce what is needed, when, and in the amount needed.
JIT manufacturing is almost like a subset of lean manufacturing. While both strategies seek to reduce waste, JIT focuses specifically on production timing, while lean manufacturing focuses more on addressing the causes of any waste.
10 benefits of JIT production
A just-in-time system requires a thorough plan. Managers need to find employees and capable software to analyze the current supply chain and map out the ongoing and future processes from ordering raw materials to production shipment.
This new master production schedule diminishes the chance of starting off on the wrong foot. The plan ensures that you can reliably monitor the new effects of the JIT inventory management system.
Here are ten both common and proven benefits experienced by thousands of JIT manufacturers:
Fast-forwarded production — JIT manufacturing can reduce throughput time, which is beneficial for satisfying the needs of customers who demand a shorter delivery time
Increased productivity — JIT manufacturers are always on the hunt to optimize processes, leading to higher productivity
Diminished rates of defects — always a sound strategy to build customer success and avoid bad reviews
Scaling down WIP processes and products — the fewer “ongoing” processes you have, the clearer your production overview generally becomes
Cutting labor costs — what manufacturer doesn’t like to save money?
Less space for operations — because manufacturers order materials only when the customer places an order, your item is already sold before it reaches you, so you don’t have to store your JIT inventory for weeks or months to come
Better product quality — JIT systems often include extra quality control measures to make sure that the final product is up to par
Reduced waste — less time spent on unwanted products means that you can avoid wasting materials, money, and hours
More control in manufacturing — Having a JIT inventory management system enables manufacturers to keep a closer eye on things and spot potential issues before they become actual problems
Local material sourcing — JIT philosophy favors sourcing local raw materials that couriers can deliver to your factory sooner. This leads to reduced transportation costs and time and improves local employment rates
Software for JIT inventory management
Lean inventory management software reduces costs and improves the way you manage your business. Here's how it works.
What are the potential pitfalls of using JIT manufacturing?
The biggest challenge by far is logistical and economic disruptions that a manufacturer has minimal control over. If a disastrous global event occurs, it can impact a JIT-based business more since there is no excess inventory to fall back on. When that happens, sales dry up like grass during a drought.
JIT production could make you very dependent on suppliers’ performance. If a supplier increases their prices suddenly, you can become unraveled as you scramble to find a better deal as inventory levels dwindle. If the price surges too high, you risk not making a profit.
JIT manufacturers also find it challenging to rework orders due to low inventory and dependency on original orders. Related to reworking orders is the relative complexity of tracking all processes.
This is where material resource planning software or enterprise resource planning (ERP) software comes to play.
Katana is an ERP software intended to boost efficiency and align your teams with tracking features designed to give you total visibility and control over production. It can help you in developing a production system that respects the values of JIT inventory management.
You can use Katana manufacturing software to streamline all your production processes and use live data for real-time planning. Katana ERP is a flexible solution for JIT manufacturers as you can integrate it with multiple accounting, e-commerce, reporting and CRM tools, while also benefiting from essential business tools like order management.
Additionally, you can check out software comparison articles for the best inventory management software to get you started searching for the perfect software for your business.