Just In Time Methodology

In this paper, we tried to present an overview on the Just In Time practices and how it originated and what it involves from goals and objectives; that would make organizations all over the world apply the concept while aiming at enhancing it's production, minimizing costs and thus generating more revenues.

We also tackled Toyota- Car Manufacturing Company as a case study for being one of the very first manufacturers who gave up old traditional manufacturing practices and started implementing JIT.

Paper Outline:

1- Introduction; History of JIT

2- Elements of JIT

3- Goals of JIT

4- Transitioning to a JIT System

A) Planning a Successful Conversion

B) The Downside of Conversion to a JIT System

C) Obstacles to Conversion

5- Effect of Just-In-Time Purchasing Relationships

6- JIT accounting: Decrease Costs vs. Increased efficiency

7- JIT Manufacturing Planning & Control

8- Example; General Motors

9- Case Study: Toyota car manufacturer

10- Conclusion

Introduction

The principle of Just in time (JIT) is to eliminate sources of manufacturing waste by getting right quantity of raw materials and producing the right quantity of products in the right place at the right time. The main purpose of this project is to provide information to the people who is interesting in knowing JIT. ( Of course, the main intend users are students in this course.)

1. History of Just in Time

Just-In-time manufacturing, or JIT, is a management philosophy aimed at eliminating manufacturing wastes by producing only the right amount and combination of parts at the right place at the right time. This is based on the fact that wastes result from any activity that adds cost without adding value to the product, such as transferring of inventories from one place to another or even the mere act of storing them.

Just-In-Time is a Japanese manufacturing management method developed in 1970s. It was first adopted by Toyota manufacturing plants (our case study) by Taiichi Ohno. The main concern at that time was to meet consumer demands. Because of the success of JIT management, Taiichi Ohno was named the Father of JIT.

After the first introduction of JIT by Toyota, many companies followed up and around mid 1970s', it gained extended support and widely used by many companies.

One motivated reason for developing JIT and some other better production techniques was that after World War II , Japanese people had a very strong incentive to develop a good manufacturing techniques to help them rebuilding the economy. They also had a strong working ethnic which was concentrated on work rather than leisure, sought

continuous improvement, life commitment to work, group conscious rather than individualism and achieved common goal. These kind of motivation had driven Japanese economy to succeed.

Because of the natural constraints and the economy constraints after World War II, Japanese Manufacturers looked for a way to gain the most efficient use of limited resources. They worked on "optimal cost/quality relationship".

Before the introduction of JIT, there were a lot of manufacturing defects for the existing system at that time. According to Hirano, this included inventory problem, product defects, risen cost, large lot production and delivery delays. The inventory problems included the unused accumulated inventory that was not only unproductive, but also required a lot of effort in storing and managing them. Other implied problems such as parts storage, equipment breakdowns, and uneven production levels.

For the product defects, manufacturers knew that only one single product defects can destroy the producer's creditability. They must create a "defect-free" process.

Instead of large lot production - producing one type of products, they awarded

that they should produce more diversified goods. There was also a problem of rising cost, the existing system could not reduce cost any further but remember improvement always leads to cost reduction. Lastly, the existing system did not manage well for fast delivery request, so, there was a need to have a faster and reliable delivery system in order to handle customers' needs. Thus, JIT manufacturing management was developed based on this problems.

2- Elements of Just in Time

According to Cheng, the basic elements of JIT manufacturing are:

* People Involvement

* Plants

* System

People Involvement

Maintaining a good support and agreement from people involved in production. This is not only reduce the time and effort in implementation of JIT, but also minimize the chance of creating implementation problem. The attempt to maximize people's involvement may carry through the introduction of quality circle and total involvement concept.

Manufacturers can gain support from 4 sources.

1. Stockholders and owners of the company - should maintain a good long-term relationship among them.

2. Labor organization - all labors should be well-informed about the goals of JIT, this is crucial in gaining support from the them.

3. Management support - support from all level of management. The ideas of continuous improvement should spread all over the factory, managers and all shop-floor labor.

4. Government support - government can show their support by extending tax and other financial help. This can enhance the motivation, and also help in financing the implementation of JIT.

Plants

Certain requirements are needed