What is just-in-time?

The just-in-time (JIT) concept, also known as production-synchronous delivery, describes a type of delivery in procurement logistics. In this process, components are delivered to the customer at the exact moment they are needed. The supplier guarantees demand-oriented procurement of the preliminary products in the production process (supply chain).

Origin - Just-in-time

The JIT concept was developed by the Japanese Taiichi Ohno. The system is directly related to the Japanese car manufacturer Toyota and was part of the Toyota production system. The basic aim was to organize the flow of materials as optimally as possible with few natural resources. The decisive difference to the just-in-sequence (JIS) concept is that the supplier does not have to pay attention to the correct sequence when packing the goods.

Prerequisites

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 are only delivered by the manufacturer at the time when the customer reports the need and requires the components. This process allows the supplier's manufacturing process to 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 sizes and calculation of the correct cycle lengths, thus significantly minimizing transport and inventory costs. Electronic data interchange (EDI) and the flow of information between customers and suppliers are essential for this. 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 stock levels are lowered and storage costs are significantly reduced. The following advantages can be mentioned in detail:

• JIT ensures transparent processes.
• Work processes are verifiable and bottlenecks are visible.
• Material in stock is small; costs are low.
• Sufficient quantities available in production.
• A continuous improvement process increases productivity.
• Competitive advantage through resource optimization and reduction of waste.

Disadvantages of just-in-time

The disadvantage of just-in-time procurement is certainly the increased communication effort between customer and supplier, and the current production status must be constantly exchanged. Other points are

• Increasing dependency between customers and suppliers.
• Shorter 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 the 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 involved are worthwhile. Notification is not required for the process.

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