Just In Time

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Just In Time

  1. 1. By- Shashank kulshrestha
  2. 2. What is JIT ? <ul><li>“ A philosophy of manufacturing based on planned elimination of waste and continuous improvement of productivity ……” </li></ul>
  3. 3. Emergence of JIT <ul><li>Evolved in Japan after World War II, as a result of their diminishing market share in the auto industry. </li></ul><ul><li>Toyota Motor Company - first to implement fully functioning and successful JIT system, in 1970’s. </li></ul><ul><li>Japanese Manufacturers looked for a way to gain the most efficient use of limited resources. They worked on &quot;optimal cost/quality relationship. </li></ul>
  4. 4. <ul><li>Involves keeping stock levels to a minimum </li></ul><ul><li>Stock arrives just in time to be used in production </li></ul><ul><li>Works best where there is a close relationship between manufacturer and suppliers </li></ul><ul><li>Goods not produced unless firm has an order from a customer </li></ul><ul><li>Aims to get highest volume of output at the lowest unit cost. </li></ul>Functioning of JIT
  5. 5. Functioning of JIT <ul><li>A method of production control. </li></ul><ul><li>No demand - no production! </li></ul><ul><li>Anticipated/planned consumer demand triggers production </li></ul><ul><li>Finished goods assembled just in time to be sold to customer </li></ul><ul><li>Component parts assembled just in time to become finished goods </li></ul><ul><li>Materials purchased just in time to make component parts. </li></ul>
  6. 6. JIT Purchasing <ul><li>Just In Time (JIT) Purchasing Is Directed Toward The Reduction of </li></ul><ul><ul><li>Waste (That Is Present At Incoming Inspection, Excess Inventory and Poor Quality) </li></ul></ul><ul><ul><li>Delay </li></ul></ul>
  7. 7. Objectives of JIT Purchasing <ul><li>To Reduce All Non-Value-Added Activities. </li></ul><ul><li>Elimination Of In-Plant Inventory. </li></ul><ul><li>Elimination Of In-Transit Inventory </li></ul><ul><li>Quality And Reliability Improvement </li></ul>
  8. 8. Companies adopted JIT
  9. 9. Some companies, benefited by adopting JIT
  10. 10. <ul><li>Dell do not have to tie up capital in stock which means they can invest it in other areas of the business, such as R&D or promotion, to increase sales. </li></ul><ul><li>Dell require less space for stock which means they save money on storage facilities which will increase their profit margins. </li></ul><ul><li>Dell have a high dependence on their suppliers and should the suppliers fail them, it is Dell’s reputation and sales which would suffer if they were unable to meet demand from their customers. </li></ul><ul><li>Dell may be unable to benefit from bulk-buy discounts which leaves them with an option of increasing the price to the customer or reducing their own profit margin. </li></ul>
  11. 11. Advantages of JIT <ul><li>Capital not tied up in stocks </li></ul><ul><li>Less space required for stock </li></ul><ul><li>Closer relationships with suppliers </li></ul><ul><li>Reduced deterioration </li></ul><ul><li>Less vulnerability to fashion and technology changes </li></ul><ul><li>Reduction in stockholding costs </li></ul><ul><li>Increase in cash flow </li></ul>
  12. 12. Disadvantages of JIT <ul><li>Danger of disrupted production due to non-arrival of supplies </li></ul><ul><li>Danger of lost sales </li></ul><ul><li>High dependence on suppliers </li></ul><ul><li>Less time for quality control on arrival of materials </li></ul><ul><li>Increased ordering and admin costs </li></ul><ul><li>May lose bulk-buying discounts </li></ul>

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