What is Just In Time (JIT)? Conditions and principles when applying JIT

What is Just in Time? This is a common term used in today's supply chain models. Just in time is also understood as instant production, which produces the "Right product” with the “Right quantity”, at the “Right place - Right time". Find out information related to Just in time in the article below by Viindoo!

The History of the Just-In-Time Principle

In 1930, the legend of the American automobile industry, Henry Ford, built the world's first industrial production line.

The production line has posed a conundrum: How can enterprises continuously produce without losing time and costs for transportation and storage? In the 70s, engineer Taiichi Ohno of Toyota Motor Company (Japan) had the answer to the above problem.

He developed a complex production system that later became known as the Toyota Production System (TPS). In particular, the Just In Time principle is a core principle, supported by the Kanban system to optimize the production line process. This is the secret to turning Toyota into a world-renowned quality icon in just 20 short years.

Later, the Just In Time method was studied and supplemented by Western scholars to develop into the Lean Manufacturing theory and was widely applied all over the world. Even Vietnamese companies like May 10 have applied JIT and Lean in production. This application has increased labor productivity by 52%, decreased defective goods rate by 8%, increased income by over 10%, and decreased production costs by 5-10% per year.

>>>> Continue With: What is Manufacturing Production Planning? 2 Ways to track manufacturing production planning

What is Just In Time?

For JIT, all processes that do not create added value in the production or service delivery process will be eliminated. Thanks to that, the system will only produce the products that customers want. In addition, JIT is a production management mechanism in which all materials, goods, and products circulated in the process of production and consumption must have a specific plan at each stage.

As a result, all output products of the previous stage are provided at the beginning of the next stage and are used up, without redundancy or waste. Since then, no part of the production process has fallen into an idle or pending state. No workers or equipment have to wait for input to start the process. 

Besides, JIT is also applied frequently in the sales process. The number of goods sold and the purchased ingredients have to be proportional to the produced products, thereby reducing capital stagnation and unnecessary inventory.

Definition of the Just In Time modelDefinition of the Just In Time model

Thus, What is Just In Time’s objective? The ultimate purpose of JIT is to stabilize the production system, that is, to ensure a regular rotation of products. In addition, this process has created stability with three main goals:

  • Eliminate interruptions: Ensuring sufficient supply at all times helps businesses limit production disruptions. Production interruptions are caused by breakdowns that disrupt the production line or delay the supply.
  • Keep the system flexible: The sustainability of the system will increase production capacity and ensure the development of the market. The system must also be adaptable to changes.
  • Eliminate loss: Inefficient use of resources is a waste. According to JIT, there are 7 major wastes:
    • Waste from excess production.
    • Waste of waiting time.
    • Shipping waste.
    • Waste of raw materials in the production process.
    • Waste products.
    • Waste of redundant operations.

>>>> See Also: Distinguish production management principles of Just-in-Time and Just-in-Case

Conditions and basic principles when applying Just-In-Time

JIT has its own characteristics and conditions, especially suitable for companies with a continuous production model. So What is Just In Time’s conditions and principles?

Conditions and basic principles when applying Just-In-TimeJIT has its own conditions and principles

Conditions

Here are some conditions when using JIT principles that businesses need to know.

  • Just in time is best applied to businesses with continuous production processes.
  • The basic feature of the JIT model is the use of many small goods with equal production scale to limit inventory and capital stagnation. This also allows businesses to easily control risks and minimize losses if something goes wrong.
  • The “goods” circulating through the production and consumption system must be specifically set up for each step so that the next stage can be executed as soon as the first stage is finished. No labor or equipment has to wait for the input.
  • Each stage will produce the right material or finished product in the quantity that the next production stage needs.
  • Products that do not meet the standards will have to be immediately rejected in the process and reported to company leaders for timely measures.

>>>> See More: Applying Flexible Manufacturing System Effectively to your Business

Principle

What is Just In Time’s principles?

  • Run no production unless the customer has placed an order.
  • Manufacture an average amount according to the needs of customers, thereby stabilizing resources throughout the factory.
  • Connect all stages in a basic visual management view of Kanban.
  • Maximize flexibility in resources and technology.

Benefits of applying the Just-In-Time principle to businesses

Best product quality in the shortest time

Workers who receive products from an earlier stage in the manufacturing process are obligated to check that the products are up to quality standards. This ensures that the products, semi-finished products, or raw materials are of both quality and quantity.

From there, the next production processes are carried out smoothly, without interruption, reducing the production time of the total cycle.

In line production, the products of the previous stage have to be perfect in order to move on. Therefore, there will be no defective product that reaches the end of the process and wastes production resources.

>>>> Read More: Free Bill of Materials Template [Excel File]

Minimize the amount of input materials

The automatic acceptance of the previous stage (also known as Jidouka - Automation) helps businesses ensure that a defective product cannot go to the end of the process.

Therefore, the consumption of raw materials for the entire process will be at a minimum (no production resources are wasted on defective products). This significantly reduces the input costs of the Enterprise while still ensuring the amount of revenue, thereby increasing the profit margin.

Minimize storage costs and capital backlog

Warehousing costs, especially for enterprises with large production systems, account for a large proportion of total production costs.

In addition, with products that have a shelf life or those that are easily damaged or lost, such as agricultural products, lengthy storage also reduces the value of the product, which may even lead to the discard of the entire shipment. With JIT, the product of the previous stage is completely consumed in the next stage, so the enterprise will not face the above problem.

Besides, the oversupply of goods also leads to the backlog of the enterprise's capital. On the contrary, producing not enough goods to sell also cost enterprises opportunity costs, as well as the risks of penalties with signed supply contracts.

Therefore, applying the JIT principle, ensuring sufficient supply at all times will be the best option that Enterprises should choose.

>>>> See more: Top 7 Best Purchase Order - PO System for Small Business​

Apply the Just In Time principle in production with Viindoo Software

The only disadvantage of the JIT principle is that it requires the administrator to have a detailed plan for each product type. To do so, businesses must possess detailed, immediate data on production needs, as well as a quick planning method to meet the timeliness, "just in time".

However, for a company producing thousands of products, manual data collection and planning is completely imagination. Companies need the help of software to automate data collection and analyze the needs of each module and customer.

From there, administrators will easily grasp the needs and set up a fully automatic execution plan with repetitive processes.

Viindoo Enterprise Management Software solution can meet that desires of Administrators. JIT is also the core principle that Viindoo applies in the software to operate smoothly from purchasing materials to selling products and services to customers.

what is just in time

All-In-One MRP Software Solution

 FREE FOREVER 

Manage Manufacturing Processes on a Single Platform!

Contact us

Set up a single-threaded product line

A single-piece production flow allows products to be moved according to the production process rather than the specialized department, thereby reducing transportation costs. Viindoo optimizes this by the feature of setting up Work Orders in small batches in the supply chain management software.

What is Just in Time's application in Viindoo software

Work orders in Viindoo follow a single-threaded process, as only a single product is created throughout the process. The setup allows the manufacturing of small batches tailored to customer needs and the monitoring of the entire production process.

A single-piece production flow allows products to be moved according to the production process rather than the specialized department, thereby reducing transportation costs.

This is optimized by Viindoo by setting up Work Orders in small batches. Production in small, just-enough batches helps businesses easily control the amount of materials and check after production.

Production Schedule and Supply

The automatic acceptance of the previous stage (also known as Jidouka - Automation) helps businesses ensure that a defective product cannot go to the end of the process. Therefore, the amount of material consumption for the entire process will be at a minimum (no production resources are wasted on products that have failed in the previous stage).

This significantly reduces the company’s input costs while ensuring the amount of revenue, thereby increasing the profit margin.

What is Just in Time's application in Viindoo softwareWork orders are shown through the corresponding color schedules in Viindoo software, making it easy for administrators to monitor and set up reasonable production processes.

Pull Rule for Supply Chains

The Pull Rule can simply be understood as the customer's demand will create the corresponding production requirement. This rule is applied from the end of the process - the consumer's need to buy goods leads the Enterprise to embark on the purchase of raw materials and production.

These rules are set up through the goods supply routes integrated with the Viindoo management software. If set up correctly, when an order is created, the system will automatically make a purchase order for materials and corresponding inventory transfer, create a work order, and execute it automatically. This helps administrators reduce the burden of detailed management and focus more on other issues in the Enterprise.

>>>> See Also: Push and pull strategy in supply chain management: Pros and cons and examples

Here is a collection of information to answer the question of What is Just In Time. Hopefully, through the above article of Viindoo, businesses have gained more insights about the JIT principle and how to apply it in the production system.

FAQs

JIT manufacturing reduces waste by producing only what is needed, when it is needed, and in the required quantities. This eliminates excess inventory, overproduction, defects, waiting time, unnecessary movement, and excess processing.

The key principles of just-in-time manufacturing include continuous improvement, waste reduction, just-in-time production, kanban system, and total quality management.

Some examples of companies that use just-in-time manufacturing include Toyota, Dell, Harley-Davidson, and many others in various industries such as electronics, aerospace, and healthcare.

Just-in-time manufacturing improves customer satisfaction by producing goods only when they are needed and in the required quantities, reducing lead times, improving product quality, and meeting customer demand more effectively. This can result in faster delivery times, better product quality, and increased customer loyalty.

What is Just In Time (JIT)? Conditions and principles when applying JIT
Bùi Thanh Tùng 24 January, 2021

SHARE THIS POST
Sign in to leave a comment


What Is A Key Result? Examples of Effective Key Results​