How does an organization sell all goods manufactured while lowering costs and increasing customer satisfaction? One of the best ways to achieve this is through just-in-time manufacturing, (JIT). It is a Lean thinking philosophy that focuses on demand-based production, as well as the production of quality products and organization-wide continuous improvement.
It is a system that seeks to completely eliminate waste in the manufacturing process by allowing manufacturers to forecast demand and produce goods based on that. That way, customers get what they need in the quantity they need when they need it.
It was developed by Taiichi Ohno in the 1970s who worked for the Toyota Motor Company. It was meant to help the company meet consumer demand in the least amount of time by minimizing delays. When it was introduced, it took Japanese manufacturing plants by storm. Now JIT is popular worldwide.
Here are the important principles to know for any manufacturer who wishes to use JIT:
Total Quality Management
Total Quality Management (TQM) is the belief that an organization can achieve higher customer satisfaction and long-term success when all members focus on quality. According to TQM, this can be best achieved through continuous improvement (ongoing process improvement for gradual, long-lasting process efficiency and financial gains). Here quality is the highest priority; it is even more important than cost.
Production management is the efficient use of the 6M’s (manpower, materials, money, machine, mother nature and measurement) to turn raw materials into finished goods. In JIT, production management focuses on a pull-based system rather than a push-based system. In a push-based system, inventory needs are forecasted in order to meet consumer demand. In a pull-based, consumer demand drives inventory needs.
Supplier management is about building long-term relationships with suppliers that will benefit the organization. In JIT, for example, this means working together with suppliers, enabling them to provide you with the exact amount of defect-free components when needed. That way, you don’t waste time inspecting them. And should problems occur, they should be communicated to the supplier in a positive manner.
Inventory management is about having the right amount of stock at the right place, time and cost at all times. This is important since JIT is not about controlling stock. You should hold little-to-no inventory and only have the exact amount that will be sold (zero inventory). No safety stocks or works in progress WIP).
Human Resource Management
Human resources management allows you to manage people in ways that make them more productive. What does this look like from a JIT standpoint?
- Involving everyone in continuous improvement and problems solving
- Encouraging open communication and high interaction among employees
- No micromanagement of employees so they take pride and ownership in their work
- Making employees feels supported and empowered
With the principles of JIT, organizations can proceed in implementing JIT in their manufacturing process. In doing so, they will eliminate waste in their manufacturing process and make sure that all the inventory they produce gets sold. This also means that organizations will produce quality products and experience long-term financial gains.