Student

REAL LIFE PROJECT

Just In Time (JIT) Today

Name: Aleksandra Kotevska

Instructor: C. Liassides

Abstract

In this report one of the most important concepts of today’s business environment just-in-time is explained. A brief paragraph of the beginning of the creation is given. Further on the importance of the concept is evaluated throughout examples. In the following parts of the report all the benefits and possible problems throughout the implementation of the JIT are listed and briefly explained. In the second part of the assignment two companies, Toyota Motor Company and General Motors are chosen as companies that are implementing JIT strategies. The various problems and opportunities they faced are explained in order to better grasp the importance of the concept. In the end the conclusion generates the overall outlook on the issue of just-in-time systems.

Table of Contents

Introduction 4

JIT systems analysis 4

History 4

Importance of the concept 5

Benefits of JIT Systems 6

Problems within JIT Systems 8

Company Analysis 9

Toyota Motors 9

General Motors 11

Conclusion 13

Reference list 13

Introduction

In today’s fast-paced environment organizations are trying more and more to satisfy the altering consumer demands and therefore became more international and vigorous. Customer’s needs are changing throughout time and nevertheless they are not satisfied merely by good quality but they demand more variety, quality service, faster delivery etc. Since the implementation of the JIT (Just-in-time) systems in the 1970’s it has been considered that the JIT system is the most important survival strategy that boosts organizations ahead of their competition. JIT systems are considered as a specific practice and as this has been the primary purpose of the creation of these systems further on it has evolved to become a wide management practice that intends to reduce costs above all and then improve the performance of the company overall. (Vokurka et al., 2007)

JIT systems analysis

History

The Just-In-Time philosophy is probably one of the most important management practices in the 20th century. It originated in Japan right after the Second World War as an outcome of the situation that Japan faced after the war. In general it is always related to the Toyota motor company. In its beginning JIT, or also sometimes called “lean” approach was acknowledged as a technique, philosophy or a way of working within an organization. At first it was thought that such a method would not sustain in Japan since the domestic demand was pretty low and because of the fact that Japanese people are more likely to purchase small quantities of different items. That is why the original idea behind the JIT was changed from a production based on making a “lot” of one item to a production based on the elimination of waste. (Beasley, 2006)

Importance of the concept

In practice the “lean” or the “just-in-time” concept has wide implications that improve operations performance. The key issue to understand when it comes to lean operations is that it basically means moving towards faster and more efficient work procedures, higher quality products or services and more importantly low cost operations by simply eliminating waste. In order to better grasp the concept as a manufacturing philosophy we can also stress the fact that the company after the adoption of the JIT system produces only what is necessary in the particular time and quantity needed. We can refer to JIT as a production and delivery schedule that focuses on adding value to unprocessed materials that are crucial for the end product. The process of “value adding” happens throughout the creation of the final product and in accordance JIT ensures efficient production by making the right materials in the correct and expected quantity available at use. (Polat and Arditi, 2004)

Many definitions try to explain the basis of the JIT approach and one of the most appropriate is where JIT is claimed to represent a method or better yet a philosophy of planning and controlling operations where the only goal is to meet the demand for a product straight away and guarantee high-level quality products with no inventory left. JIT is one of the most disciplined concepts that prevail in today’s business environment. Moreover it is a “survival strategy” that is implemented in manufacturing organizations that deal with a lot of inventory and in service organizations that aim at maintaining customer devotion and satisfaction by on-time delivery. (Prajogo and Johnston, Unknown)

In evaluating the JIT concept we must mention the facts that in the 20th century companies adopt JIT so they can uphold their brand name and maintain competitive advantage. According to (Vokurka and Lummnis, 2000) “… just-in-time initiatives improve cycle times and begin to solve the trade-offs between efficiency and productivity”. (p. 14) As a consequence companies that implement JIT strategies do not move toward development of their firm only, yet they go beyond to the entire supply chain they work with. Firms that deal with manufacturing tend to take a number of initiatives for improvement of the overall performance and to become as flexible as possible in order to meet consumer demands. However managers must be aware of the fact that as society moves forward JIT will offer new ways of improving both effective performance and flexibility within the organization and not being able to adopt these new techniques will not go in favor of the business in a whole. (Vokurka et al., 2007)

Benefits