More than just a model of production, Just-In-Time is a work philosophy that essentially consists of the opportune influx of raw material or finished products, in order to manufacture the first one and deliver the latter. Just-In-Time system (JIT) was initially thought and implemented in Japan in the late 1970s. The idea was originated in the Automotive company Toyota. The enterprise was looking for improving the flexibility of the industrial processes because of the economic emergency that took place in the whole world, related to the oil crisis of that decade (actually there were two crises, and this events happened during the second one). The Japanese company were experiencing low peaks in its production and the shareholders had the urge to find a system that could save it from bankruptcy.
The Just-In-Time philosophy is composed of fourteen elements. The first seven are related to the treat of workers, and the second half, to technical aspects of industrial production. When the Just-In-Time system was consolidated as a practical method, people from all over the world started to learn more about it and implement it in their own companies.
The basics of Just-In-Time production are very simple and easy to take into practice. In first place, the first objective is to reduce wastes at all cost. In second place, the gradual improvement of goods and services offered by the company in question. Additionally, the creation of deep human bonds of loyalty and companionship between every single employee of the company. Some of the positive effects of implementing these strategies are, by one hand, the higher involvement of workers in their tasks (because they feel they are doing something constructive to the company they belong), and, in second hand, the increase of productivity, satisfaction of customers, sales and the systematic decrease of costs.
In other words, the dream come true of any company manager. But what kind of methods and steps must be taken for reaching such results? In general, the idea is to reduce inventories to minimum numbers for reducing the cost of warehousing and inventory management. Also, the improvement of quality controls and the proper use of the skills of every member of the staff. Just-In-Time philosophy suggests the importance of producing only what is necessary. The basic rule is stop producing what a company will not sell, and stop selling what a company is not able to produce. Adjusting the production process to the specific demands of clients makes production less expensive and more profitable in the long run. A good example of this is the Print On Demand system of book-selling companies like Amazon and Lulu, which makes it easier for sellers to send the purchased product to the clients and not keeping mounts and mounts of books that will probably be sold for a cheaper price, years after they were printed. Or maybe they will suffer a terrible damage that will make it impossible for the company to sell the whole inventory.
The excess of inventory is one of the main causes why any production enterprise losses thousands and thousands of dollars every year (millions, in some situations, like Microsoft and its Windows Phone or Google Glasses). Just-In-Time philosophy recommends to use that huge amount of money in other aspects that will improve the productivity and welfare of workers by far. Also, the warehouse expense becomes a headache most part of the times, in particular, when merchandise must be kept on special conditions for being preserved (for example, refrigeration). In consequence, this philosophy takes managers to build better competitive advantages by modifying the structure of the production process.
The way of doing this, of course, depends on a well-thought plan. It is impossible to achieve the good results of Just-In-Time production only by improvising every day. A good analysis of the produced waste (in activities, energy and materials) must be done by experts before doing any move. In addition, the next step of that plan should include five variables that must be modified in order to implement JIT. The first one is costs (production, transport, logistics, etc.), of course. The second one is the quality of products, services and functions of all workers (including those in the high spheres of the food chain). The third one, linked to the prior one, is to improve service: attention to clients (seems pretty obvious, but think of how many people implement this in the practice). The fourth one is flexibility: the ability of adapting to different circumstances of the ever-changing market. And the fifth one is innovation: not just of the manufacturing process, nor the quality of products and services… but the evolution of the offers provided by the company in the market, which could change depending on the demands.
I hope it works! See you next time.