Page 54 - P1 Integrated Workbook STUDENT 2018

Chapter 3

Just In Time (JIT)

5.1 What is Just in Time?

(JIT) is a method of inventory control based on two principles:

 goods and services should be produced only when they are needed.

 products (or services) must be delivered to the customer at the time the
customer wants them (‘just in time’).

This in turn requires that suppliers deliver raw materials to production just as they are
needed so that purchasing happens just in time for production.

JIT is often a crucial element of TQM. JIT sees inventory as waste and a cost
burden, and, in its extreme form, a JIT system seeks to have zero inventories.

5.2 Pre-requisites for JIT

 High quality. Without high quality there will be disruptions in production,
reducing throughput. Production must be reliable and not subject to holdups.

 Speed. Throughput in the operation must be fast, so that customer orders can
be met by production. Without fast throughput, it will be necessary to hold some
inventory to meet customer orders.

 Flexibility. The production system must be able to respond immediately to
customer orders. Production must therefore be flexible, and in small batch
sizes. The ideal batch size is 1.

 Lower costs. Fewer errors, less waste, greater reliability and flexibility and faster
throughput should all help to reduce costs.

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