How to implement just-in-time method to be successful in a competitive environment?

The phenomenon of globalization has led the companies to be in an environment where competition is key to success, to achieve it must implement the efficiency and quality in their internal policies, using theories like “Just in time” (JIT) which has as a main goal to don´t have interruptions in the manufacturing process or delays in the delivery of the final product. Also it promotes the optimization of resources within the organization creating a competitive advantage in production quality, which results in most cases in economic benefits for the company.

Origins of the JIT:

According to some authors, this theory was created in 1976 by Toyota, in response to the reduction in productivity caused by manufacturing problems in their processes. Then, some Japanese organizations become pioneers in implementing this model as a philosophy of work in order to optimize their production system and seeking to recover itself from the economic crises of that time, becoming an example of innovation for the world.

Why is it important to implement this method in companies?

The philosophy Just in time is important because companies that implement this methodology as a strategy are recognized by supplying products at the agreed time by the client and with the best quality, so you can supply the demand satisfying the needs of consumers and contributing to the minimization of costs, increased sales, which means to achieve higher profits, it helps to these companies to have a position as a leader in the market and increase the good will of the company.

fabric_david kiger_just in time production
Image courtesy of Biblioteca de Arte at Flickr.com

How is it implemented?

The implementation of this methodology involves producing just exactly what it takes to carry out the orders requested by the client, to achieve this you should ask the provider the exact amount for the manufacturing line, which should to be on time for production, this is in order to optimize resources, in this sense, the idea is to produce the smallest number of units and at in the right time set by customer in his order, removing the need to store the final product, because the stocks are enough and these are just in time to be replaced in the moment that have been used, as a result the Company achieve a reduction in inventory and space.

To achieve this goal is necessary to have a correct strategic plan and proper execution of the processes of the company, reviewing every detail from the beginning to the end of the supply chain; To do this you must analyze the costs and benefits of the implementation of this methodology, then you should do a pilot with a small sample to verify if the amount of resources are optimal for the system to work, additionally you must make improvements in processes: first you should reduce the time of preparation of the machines and make preventive maintenance of these machines and second you must make improvements in statistical control and quality control.

It is very important to consider the relationship with the client from the beginning to the end of each production cycle, because customer satisfaction is one of the objectives of the Just in Time philosophy. Also, you should consider to have an effective communication with the supplier, making a correct selection and doing the payments within the established time to avoid delays in the arrival of the raw materials.

The advantages and disadvantages

The main advantages that companies have been identified by using this methodology are: you can increase the quality of the final product, and have a significant reduction in waste of raw materials, to achieve to optimize human resources, have a stock reduction, have a significant reduction in variable costs, increased clients, which means to have higher sales and increase the profits of the company, etc.

On the other hand, like all organizational methodology also has its risks and disadvantages, for example, when the order placed by the customer is small, when it is produced, the company cannot increase yields scale production, this means that the amount orders are not enough to make the costs of producing decrease, which means that the final price increase for consumers. Also incurs the risk of production delays caused by lack of raw materials.

In conclusion

This method seeks to make the most simple production processes in companies, minimizing waste and saving all possible storage space, resulting in considerable reduction in manufacturing time of the final product, is for these reasons that many organizations that have become world leaders attribute their success to the adoption of this philosophy in all departments of their companies, which requires a cultural change within the organization, obtaining as a result increased in yields, higher profits and customer satisfaction.

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