Advantages and disadvantages of just in time (JIT)

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Advantages and disadvantages of just in time (JIT)

This article explores some of the advantages and disadvantages of just in time (JIT). Just in time aims to minimise inventory and increase efficiency. It is also known as lean production, just in time manufacturing, and just-in-time production.

What is Just in time?

Just in time (JIT) refers to everything happening just in time. As a concept, it is easy to understand; however, implementing it in practice is a different thing. According to Toyota (2021), Just-in-time means making only what is needed, when it is needed, and in the amount needed. It is a philosophy of complete elimination of waste.

According to Beasley (n.d), Just-in-time originated in Japan. It is generally associated with the Toyota motor company. It was initially known as the ‘Toyota Production System’. Taiichi Ohno of Toyota is widely accepted as the father of JIT.

JIT is about producing and delivering the necessary things at the right place in the right quantity. This gives a very limited sense to JIT. However, in a broad sense, JIT is an approach to accomplishing excellence in a company. It is an organisation wide philosophy and should be treated accordingly, not simply as a set of procedures.

Waste elimination

According to Beasley (n.d) Ohno devised a new system of production based on the elimination of waste. In his system, waste was eliminated by:

Just in time – items only move through the production system as and when they are needed.

Autonomation – enabling machines to be autonomous and able to automatically detect defects

Advantages of Just in time (JIT)

Implementing JIT in workplace has many benefits. It reduces inventory levels, increases productivity, reduces space requirements, and creates pressure for good vendor relationships. Organisations can also maintain high quality and gain flexibility through the use of JIT.

Traditional stock controlling may sometimes be very costly for many organisations. Therefore, JIT which is an alternative stock control method, can be very useful for them. With this method, businesses do not need to hold any stock; rather they will rely upon deliveries of raw materials to the factory floors when the time of production comes. This helps companies reduce production costs and improve competitiveness.

As organisations are not holding stock, the likelihood of stock perishing, or becoming out of date is limited or none. This also helps them reduce their inventory and production cost. Organisations can then use the savings in other areas e.g. marketing, PR, and HRM to increase visibility of the products and achieve competitive advantages.

Disadvantages of Just in time (JIT)

There are a number of disadvantages which can be attributed to JIT. For example, disruption in the supply chain may sometimes be very challenging. If a supplier of raw materials fails to deliver supply on time regardless of what the causes are, it may lead to a shutdown of the entire production process in a company.

External factors such as a natural disaster could also impact on the delivery of raw materials from the suppliers to the company potentially resulting in a complete halt in the production process.

Prices of raw materials may go up suddenly. Some suppliers may increase the prices as well in response to the change in demand. Therefore, when the prices go up, a company’s profit margin can be greatly affected. In such situations, operations managers may feel that they should have bought stock well in advance.

We hope you like the article ‘Advantages and disadvantages of just in time (JIT)’. You may also like reading Supply chain concepts, principles, and processes. Other relevant articles for you are:

What is Operations Management?

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Last update: 19 October 2021

References:

Beasley, J. (n.d.) Just-in-time (online), available from http://people.brunel.ac.uk/~mastjjb/jeb/jeb.html (accessed 19 October 2021)

Stevenson, W. (2009) Operations Management, 9th edition, The McGraw-Hill Companies, Inc

Toyota (2021) Just-in-time: philosophy of complete elimination of waste, available from: http://www.toyotaglobal.com/company/vision_philosophy/toyota_production_system/just-in-time.html (accessed 19 October 2021)

Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.