What Does JIT Mean?

Just-in-time (JIT) refers to a specialized technique through which cycle times can be reduced relating to the production system in the factory. It helps in expediting the time management and response time from suppliers to the end-users. This method is also called Toyota Production System (TPS) because it was used by a manufacturing plant in Ohio for the first time. 

JIT is primarily used as an inventory management system to expedite efficiency while reducing overhead factory or office expenses at the same time. JIT is also helpful in managing stock and keeping a record of the same. It minimizes the warehouse rent without affecting your production capacity. 

Read more: What is the jit Compiler?

JIT Alternatives: Inventory Management System

Over the last few years, several companies have adopted this technique though with different names. 

Motorola uses SCM (Short-Cycle-Manufacturing) while IBM implements CFM (Continuous Flow Manufacturing). Also, some companies execute Lean Manufacturing System (LMS). Popular companies which use JIT are McDonalds, HP (Compaq), Dell, and other IT companies. 

IT and automobile industries are a couple of sectors where JIT is in much demand. 

Advantages and Benefits of JIT

• It helps in keeping the inventory cost too low.
• You can reduce your warehouse expenses by executing the JIT system.
• Supply chain management runs smoothly with minimum inventory. 
• It reduces the amount of investment towards working capital. 
• It enhances the ROI of the firm. 
• The concept is based upon the demand of the time. All product units are sold without any wastage or backlog. 
• Finished goods consist of all the latest products.

Disadvantages of JIT at a Glance

• For any kind of error or accidental loss, the inventory can’t maintain that supply. There’s no room for error.
• JIT is not suitable when a product sees a sudden surge in demand. 
• The execution of JIT requires greater coordination and teamwork. The whole supply chain has to work in sync with each other.
• Even if a single element within the supply chain goes wrong, the entire production and manufacturing process will suffer in JIT.

Conclusion:

JIT concept in technology-based upon the foundation of maximum produce or yielding with low inputs. It aims at long-term profitability of the firm while keeping the production-related expenses at an all-time low. In order to make JIT execution a great success, you must bring all your resources together for a common object.