Just-in-time is perhaps the best known
method utilised within a lean production environment. It is a process which
aims to reduce the costs of holding stocks. Finished goods, work in progress
and raw materials are kept to a minimum level by ensuring that stocks are only
produced when they are needed. Holding stock adds to business costs in a number
of ways:
·
Firms
have to pay for the storage space where stocks are held.
·
Cash
is tied up in stored stocks rather than allowing working capital to be used
more efficiently.
·
Regulations
or customer requirements may change which could render current stocks unusable.
·
Any
defects in large quantities of stock may cause costs of rework.
·
The JIT manufacturing system achieves
high volume production using minimal inventories.
·
In the JIT System, inventory is always
kept at a low level, thus reducing the production lead times.
·
Firms can maintain consistent quality
of products and processes by coordinating the various production processes.
·
Successful implementation of a JIT
program requires teamwork, discipline, and supplier involvement.
·
The JIT manufacturing system is based
on the concept ofcontinuous improvement which includes the two mutually
supporting components of people involvement and total quality control.
·
The JIT system entails uniform
workstation loads, small lot sizes, closer supplier ties, maintenance of high
quality, quick and economic set-ups, flexible facilities, and multi-skilled
workforce, preventive measures and continuous improvement.
With just-in-time, the demand for new
buildings 'pulls' supplies through the system. This is a very important
business principle. When demand increases Portakabin orders
and builds new component supplies, rather than having these in stock 'just in
case'. For example, the Portakabin Ultima range consists of
high quality workplaces for up to 1,000 people. In order to meet the demand
from businesses for these buildings Portakabin only holds the
stocks it needs for orders in process. This reduces costs and ensures that the
components ordered specifically meet the requirements of the individual
businesses.
Detailed information technology
systems are used to manage the flow of production. These record supplies at
every stage of production to ensure components are available exactly when
required. Good relationships with suppliers are also necessary as any delay in
delivery of raw materials can hold up the entire production process. JIT also
helps the internalPortakabin production process by providing
components only when needed by the next stage of production.
