Posted: March 3rd, 2020

Effectiveness of the Implementation of JIT Production Process in Organizations

Effectiveness of the Implementation of JIT Production Process in Organizations
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Abstract
Just in Time is an inventory and management system where materials are bought and products are manufactured only in the amount and when required to meet actual client demand. This study examines its development and its application on various organization. Various elements, strategies and important issues of JIT have been discussed in detail. Its advantages and benefits as well as how it improves organization competences has been outlined. The research method involves reviewing and analyzing the information from already existing literature in different scholar’s published articles and publications on the subject as well as reviewing JIT implementation practices applied by various manufacturing companies such as Toyota. The disadvantages have also been discussed and the reasons for the failure have been critically evaluated. The results of the review show that the advantages behind the implementation of JIT production process outweighs the disadvantages through the numerous advantages it brings to the organization such as reduces waste, saves time of production, cuts on inventory cost, cuts on warehouse cost, improves quality of products as well as increases flow of work. Therefore, JIT production process proves to be effective to organization production, thus, the need for its implementation.

Table of Contents
Abstract 2
Introduction 5
Problem Statement 5
Just in Time (JIT) Inventory Management: 6
History of the Technique 6
The Purpose of JIT/ Company Use 7
Advantages and Disadvantages of the Just in Time Method: 8
Potential Risks 10
Examples of JIT 11
Successful Examples 11
Unsuccessful Examples 12
Benefits of JIT Manufacturing 12
Principles of JIT: 13
• Eliminate Waste: 13
• Deliver Fast by Managing Flow: 13
• Practice Iterative Development: 13
• Build Quality In: 13
• Pair Programming: 13
• Test-Driven Development and Constant Feedback: 13
• Automation: 13
Effect of installation of JIT system: 13
JIT implementation approach: 13
A. Necessary Tools for JIT Implementation 14
B. Getting the Commitment of Top and Middle Managers 14
C. Creating a Clean, Orderly Work Environment 14
D. High-quality finished products 15
E. Flexible Facilities and Multi- Skilled Workers 15
Planning a successful JIT system 15
Employee involvement in decision making 15
Supplier participation 15
Total quality control 16
Production staff must be multi-skilled 16
Main Features of Just-In-Time Production 16
Continuous improvement 16
Maximizing Workflow 17
Eliminating waste 17
Minimizing warehouse cost 18
Stronger relationships and Employee satisfaction 18
Conclusion 19
References 20

Introduction
The JIT system is a management strategy that lines up the order of raw materials from supplier to direct processes of production. Organizations implement this strategy with the aim of increasing their efficiency and reduce waste by purchasing materials only when needed for production. Numerous research has reported the advantages of employing JIT production process such as increasing the quality of a companies produced goods as well as helping them cut the response time to market demand to more than 90%.
However, JIT requires production team to forecast accurately of demand in order to enjoy the benefits that come along with JIT implementation. In addition, the most commonly known benefit of JIT inventory system has its own disadvantages but in the eventually they are outweighed by the benefits. In this research paper, the main focus will be on the effectiveness of implementing JIT production process by outlining the full picture as to why companies should not hesitate adopting it.
Problem Statement
JIT management strategy was first developed in Japan by Toyota company with the aim of fulfilling customer demands without delays. Since 1970s it has been in use but regardless of the extensive publicity and interest, only few organizations have implemented JIT inventory system in their manufacturing operations. Researchers rarely get past reporting on its benefit of lowering the inventory cost and rarely describes the technique improves the whole manufacturing process. Organization managers on the other hand know only about the title and rarely understands how it can help their company operations. Mostly they focus on the eventual benefit of increasing organization’s ROI. Therefore, there is need for carrying out the intensive research on the JIT inventory system so as to present organizations with an overall overview on what it is all about so that organization can have an understanding of the effectiveness of its implementation.
Just in Time (JIT) Inventory Management:
Just-in-time also identified is a technique used in the manufacturing process of products in such a way that the labor, raw material and goods used in this process are managed to be available at the exact time they are needed in the manufacturing process.
Additionally, it is generally considered to describe inventory that arrives or is produced just in time for the next process or for shipment. It improves processes of manufacturing by removing all waste process comprising of excess inventory, wasted materials and steps. JIT also defines lean manufacturing that depends on systems of Just-in-time inventory. The systems of JIT inventory relies on logistics that comprise of: warehousing, transportation, and a number of other strategies for dealing with other possible uncertainties of supply chain. To understand better one can to grasp it in a literal manner that everything is happening just in time its needed.
History of the Technique
The Just in Time inventory process was first established and applied in the manufacturing plant of Toyota with the aim of meeting clients’ needs without delays. The Japan Taiichi Ohno organization is considered the founder of Just in Time management system. Toyota solved the growing survival challenges via a management tactic that was wholly concentrating on organizations, systems and workforce. Toyota recognized that the technique of JIT was to be effective if each individual in the company was dedicated and involved, when the organization and the processes remained organized properly for maximum productivity and effectiveness, as well as if the quality of products and the tools of production remained organized to fulfill the exact client’s demands.
The Purpose of JIT/ Company Use
The key purpose of JIT is to recognize and correct the challenges in the process of production by showing the problems that are hidden in the inventory process. The technique makes it possible for the organizations to avoid using excessive inventory as well as smoothening the operations of production if a certain task takes too much time than it was anticipated or a faulty part is recognized in the system. This also explains why the companies that have opted to implement JIT inventory system invest in preventive maintenance so that when there is a mechanical problem the process of production will still continue.
The main aim of Just-in-time process is to increase the turnover inventory and reduce the holding and other costs associated with the process. The inventors of the technique made this concept applicable in such a way that when a company places an order for raw materials they can still receive them the same day they are producing the final product such that there is no waiting time. In addition, this process helps most companies avoid carrying out voluminous inventories which end up making most of them incur other manufacturers related costs. However, for most users of JIT o enjoy its benefits, optimum synchronization is expected between the material delivery and the manufacturing cycle.
Just-in-time (JIT) managements system needs a good understanding of manufacturers and suppliers in terms of the quantity of the product and delivery. In case there is a misunderstanding between the two parties, the whole production process may be compromised. A notable example of a JIT system is a vehicle making company which that operates with minimal inventory levels as it strongly relies on the supply chain to deliver the component needed to make cars. The required components cannot arrive prior to or after they are required; they only get to arrive at the exact time they are needed.
Whether or not JIT is successfully implemented largely depends on how a manufacturer deals with suppliers. Such suppliers are usually under intense pressure as they have to be on standby with enough quality products in case an order is made.
Advantages and Disadvantages of the Just in Time Method:

Advantages of Adopting a JIT System
• The JIT approach helps minimize or altogether do away with wastage. The likelihood of out-of-date or expired products is almost zero.
• The approach maintains stock holding costs at a minimum level. The process of ordering materials only when needed results in better space utilization and has a favorable effect on rent and insurance costs that would otherwise have to be made.
• Since only the essential stock needed for manufacturing is ordered under this management approach, less working capital is needed. The manufacturer sets a minimum re-ordering level and only orders more stock when that particular level is attained. Such an arrangement also presents a boom in inventory management.
• Thanks to the low stock level, a manufacturer’s ROI (return on investment) can be quite high.
• The JIT approach puts emphasis on the ‘right-the-first-time’ concept, meaning it cuts on inspection and re-work costs.
• The demand-pull strategy that characterizes this approach means all goods manufactured will be sold, while also factoring in changes in demand. Hence, the strategy is quite appealing in the modern business environment characterized by fickle and volatile demand.
• By adopting the JIT approach, manufacturers can achieve greater efficiency and come up with high quality products.
• There is a higher level of customer satisfaction as communication with customers is constant.
• The approach fosters better business relations within the production chain.
• Adopting a JIT system does away with overproduction as only the products orders get to be made.
Disadvantages of Adopting JIT Systems
• Lack of buffers in Just in Time inventory, the production process downtime can happen which can have negative consequence to the process of production as well as in finances.
• Just-in-Time process is not beneficial to the environment as the frequent transportation of raw materials results and deliveries to higher amount of fossil fuels that are burnt thus more greenhouse gases to the environment that causes global warming.
• Lack of excess inventory of finished products limits the organizations from enjoying the benefits of unexpected increase in request of orders from clients.
• The technique does not have any tolerance for mistakes thus making the practice of re-working hard because the inventory is maintained at a minimum degree.
• However much the JIT cuts on cost, sometimes the frequency of transactions ends us making the tractions cost a bit higher than planned.
• The cost reduction enjoyed through buying materials is lost
• The suppliers must always be reliable and flexible otherwise the production process is might stop.
• There is no renegotiation time with clients
• There is potential destruction of supply chain
Main Features of Just-In-Time Production
Continuous improvement
JIT production system provides an effective evaluation process in every phase of an operation. Businesses look at each area of production and find out if it affects or not to look for ways to make it better. Besides, JIT forces business to ensure its processes is lack of error-free as possible. That means to become more efficient, they are encouraged to make better processes and quality products. The reward comes from doing things right. Additionally, JIT production encourages workers to examine the current process and provide suggestions for improvement, which in turn improves quality. According to Davies (2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers), JIT requires that organizations not to plan for mistakes and errors, but rather look at the process and find ways to reduce the chances of those errors happening in the first place. The focus moves from contingency to quality. It requires a commitment to quality control. It also offers a level of respect to employees, as the business is willing to switch to an approach that relies on them performing well consistently. A committed workforce, quality products with lower defect rates that increase the satisfaction of customers.
Maximizing Workflow
The JIT system maximizes its workflow by making the entire origination has a different approach to production. The workforce expected to understand the whole process of JIT and move to locations where they are needed because the flow of work reduces and increases according to the client’s demand swings. This turn results in the commitment and loyalty of employees to work as they are always on toes waiting to implement the next requirement from the JIT system. According to “Just In Time – Meaning, Features, Advantages, and More”(2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers), JIT system manufacturers are always aware of when the workers are needed in a particular situation of a line of work to attend to the demand of that stage. Besides, the flow of work is maintained since the management has the entire process in their mind, from raw material intake to the final product. Similarly, most organizations that implement the JIT system have multiple suppliers for the raw materials that are at close locations to provide them with raw materials within the shortest time possible to ensure the workflow does not stop.
Eliminating waste
JIT system is mostly focused on minimizing the overproduction waste, time for waiting for raw materials and holding excess inventory. According to Monden (2011), this concept invented by the founder of Toyota company. That was the aim of basically manufacturing what is required, at the specific time when will it be required, and the amount required. Which turns to improves productivity by streamlining the processes of manufacturing and slashing inventory. In short, the JIT system allows an organization to work intelligently, eliminate waste such that only minimal the inventory will be required.
An example of this process is the American supermarket. When clients are shopping for groceries, they take what they want from shelves and pays for them. The supermarket turn restocks the shelves with new products to fill the empty spaces that are left. In a production instance, an employee would go to the inventory storage, take the raw material required for production, and inventory storage would refill the space with the same amount which was taken by a worker. The JIT inventory model, therefore, allows manufacturers to cut on overproduction waste by manufacturing products according to the client’s demand, reducing the wasting time of waiting for production materials by restocking the used materials and holding on excess inventory.
Minimizing warehouse cost
According to Davis (2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers), when it comes to inventory cost, organizations pay for storage, insurance, delivery, and rent for warehouses. Moreover, when organizations face inventory management problems, there is a possibility they might end up lacking important materials of production. Therefore, any system that matches inventory requirements and supply improves the operations of a company in many ways. The author also adds any system that carries the essential minimum of stock assist in storage charges to cash flow and carries charges. On this note, the excess inventory of the warehouse can be costly, and cutting the cost of inventory that can reduce the carrying cost. Therefore, organizations implementing the JIT model can reduce the number of warehouses they own or eliminate some. The JIT model helps companies reduce warehousing costs that end up reducing the production cost.
Stronger relationships and Employee satisfaction
The JIT production process offers a conducive environment for teamwork, inspires multi-skilled workforces, and offers flexible facilities. These positively enhance the production system. The shot portions of productions at recurrent intervals enables an organization to find new means of improving the product. That gives the organization product competitive advantage, provides an idea to make strategies, cut on added cost, and attain more effective operations. Also, the JIT production model encourages a strong relationship between suppliers, vendors, and manufacturing organizations as well as allowing transparently, timely flow of information between them. This turn helps build supply coordination that is resulting in a stronger long-term business relationship.
Conclusion
In conclusion, considering the outlined benefits, the mode of operation as well as its features, the organizations are presented with a clear overview of what JIT is all about and why adopting the process can be beneficial as well as effective to their production process. Additionally, the organizations that have been hesitant to implement it can as well see how it has been used by different companies and the success factors such as in Dell and Toyota companies thus boosting their confidence on the system.
Moreover, in addition to providing companies with great ROI and reducing production cost, companies can see the improvements of operating with low inventories. This system removes the security cover of high inventory and reveals the problems of operations. These are problems that JIT faces and solves. Therefore, implementing of JIT production process by organizations means a big change in their culture and their production problems. This is in the sense that, the established rules and routines become obsolete, the inventories’ back up regarded to be insurance against unanticipated delays and shortages become evidence of non-convincing controls and planning and also a form of being lazy. And finally, large production batches cannot be perceived as advantageous because they assist in amortizing the setup cost. JIT reduces this type of waste. Therefore, JIT process proves to be effective to organization production, thus, the need for its implementation.

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