Just-in-Time

What is just-in-time?

The concept of just-in-time (JIT) or production-synchronous delivery describes a type of delivery in procurement logistics. In this process, the delivery of components takes place at the exact moment of demand at the customer. The supplier guarantees a demand-oriented procurement of the preliminary products in the production process (supply chain).

Origin - Just-in-time

Entwickelt wurde das JIT-Konzept vom Japaner Taiichi Ohno. Das System steht in direktem Zusammenhang mit dem japanischen Automobilhersteller Toyota und war Teil des Toyota-Produktionssystems. Grundlegendes Ziel war es, mit wenig natürlichen Ressourcen den Materialfluss so optimal wie möglich zu organisieren. Entscheidender Unterschied zum Konzept Just in sequence (JIS) ist hierbei, dass der Zulieferer beim Verpacken der Ware nicht auf die korrekte Reihenfolge achten muss.

Requirements

Companies that operate according to the just-in-time strategy coordinate the entire material flow with the production process. This reduces throughput times in production and minimizes storage costs. This is because the products will be delivered by the manufacturer only at the time when the customer reports the need and requires the components. Through this process, the supplier's manufacturing process can be seamlessly linked to the customer's production process.

This form of procurement logistics is made possible by well-organized transport planning, which is characterized by optimal delivery size and calculation of the correct cycle lengths and thus significantly minimizes transport and inventory costs. For this, electronic data interchange (EDI) and information flow between buyer and supplier is indispensable. The automotive industry practices this type of logistics to perfection.

Just-in-time advantages

If a company decides to work according to the just-in-time principle, the entire material flow should be coordinated with the production processes. Throughput times are minimized, warehousing and inventories are reduced and thus storage costs are significantly reduced. In detail, the following advantages can be named:

  • JIT ensures transparent processes
  • Work processes are verifiable and bottlenecks are visible
  • Material in stock are small; cost low
  • Quantities sufficiently available in production
  • A continuous improvement process increases productivity
  • Competitive advantage through resource optimization and waste reduction

Disadvantages just-in-time

Thedisadvantage of just-in-time procurement is certainly the increased communication effort between buyer and supplier and the current production status must be constantly exchanged. Further points are:

  • Increasing dependence between customers and suppliers
  • Shortened throughput times can have a negative impact on quality
  • Hardly any price competition due to long-term contractual obligations
  • Environmental influences (traffic) may hinder timely delivery

Conclusion

The just-in-time concept ensures a minimization of warehousing costs and shorter changeover and throughput times. Material stocks can be significantly reduced in the production process and made much more flexible. To implement the concept, it is important that as many prerequisites as possible are met so that the changeover and the effort are worthwhile. Notification is not required for the process.

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