This was when he conceptualized Just-in-Time, and along with it, the Kanban methodology. Taiichi Ohno, known as the father of the Toyota Production System, traveled to the United States to study and observe their manufacturing processes. JIT was seen to have been fully implemented and formalized by the automobile industry in Japan, particularly Toyota. However, the concept had proved to be so effective that the Japanese identified it as an essential foundation to implement a truly lean process. The birth of the Just-in-Time philosophy may have come out from a necessity to survive. This resulted in a smaller lot productions and carefully designing processes to be as lean as possible. They also faced a shortage of natural resources and space to rebuild their factories, which forced them to carefully utilize what they had. Due to the aftermath of the war, Japanese companies were lacking the capital to spend on large-scale productions compared to more highly developed countries at that time. It is known that during the post-World War II era, the Japanese developed and used the concept of Just-in-Time. When implemented correctly, JIT enables companies to eliminate waste, cut unnecessary costs, and improve its overall productivity and profitability. However, the system relies heavily on the reliability of parts and supplies entering the production stream along with smooth operational flow on the production floor. JIT has proven to increase operational efficiency. This is what Just-in-Time aims to eliminate. Companies risk capital tied to inventory, warehouse costs, and obsolescence to name a few. Stocking up on inventory to ensure demand is satisfied may seem ideal, but it comes with a significant cost. Opposite to Just-in-Time, the goal of the JIC system is to reduce the risk of a stock shortage due to unexpected circumstances, such as a rise in customer orders, supplier reliability issues, and logistic issues. This is known as the Just-in-Case (JIC) inventory system. Products are produced when they are needed and in the quantity needed.Ĭompanies often store excess product inventory to be responsive to customer demand. Just-in-Time (JIT) is an inventory management system intended to increase production efficiency and profit by controlling inventory and associated costs.
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