Japanese automakers implemented just-in-time (JIT) manufacturing after WWII to gain more efficient use of limited resources in the face of declining market share. The Toyota Motor Company was the first to fully implement a successful JIT system in the 1970s. JIT aims to produce only what is needed when it is needed and keeps stock levels minimal by having components arrive just before assembly in a close supplier relationship, reducing costs from excess inventory.

2.  Evolved in Japan after World War II, as a result
of their diminishing market share in the auto
industry.
 Toyota Motor Company- first to implement
fully functioning and successful JIT system, in
1970’s.
 Japanese Manufacturers looked for a way to
gain the most efficient use of limited resources.
They worked on "optimal cost/quality
relationship.

3.  Eliminating wastes
 Total quality management
 Parallel processing
 Jit purchasing
 E-commerce and JIT purchasing
 Reducing inventories through setup reduction
 working towards repetitive manufacturing

4.  Involves keeping stock
levels to a minimum
 Stock arrives just in time
to be used in production
 Works best where there
is a close relationship
between manufacturer and
suppliers
 Goods not produced unless
firm has an order from a
customer
 Aims to get highest
volume of output at the
lowest unit cost.
Functioning of JIT

5. Functioning of JIT
 A method of production
control.
 No demand - no production!
 Finished goods assembled
just in time to be sold to
customer
 Component parts assembled
just in time to become
finished goods
 Materials purchased just in
time to make component
parts.

6. Reduces inventory
Reduces lead time
Reduces setup time
Just-in-Time ManufacturingJust-in-Time ManufacturingTraditional ManufacturingTraditional Manufacturing
Increases inventory to
protect against process
problems
Increases lead time to
protect against uncertainty
Disregards setup time
as an improvement priority
Just-in-Time PrinciplesJust-in-Time Principles

7. Emphasizes team-
oriented employee
involvement
Emphasizes pull
manufacturing
Emphasizes zero
defects
7
Just-in-Time ManufacturingJust-in-Time ManufacturingTraditional ManufacturingTraditional Manufacturing
Emphasizes work of
individuals, following
manager instructions
Emphasizes push
manufacturing
Tolerates defects

10. • 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.
• Dell require less space for stock which means they save money on
storage facilities which will increase their profit margins.
• 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.
• 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.

11. • Continuous improvement
• Build an organizational culture and value
system that stresses improvement of all
processes
• Part of everyone’s job
• Respect for people
• People are treated as
knowledge workers
• Engage mental and
physical capabilities
• Empower employees

12. • Standard work practice
• Work shall be completely specified as to
content, sequence, timing, and outcome
• Internal and external customer-supplier
connection are direct
• Product and service flows must be simple
and direct
• Any improvement must be made in
accordance with the scientific method at
the lowest possible level of the
organization
Toyota Production System

13.  Capital not tied up in stocks
 Less space required for stock
 Closer relationships with suppliers
 Reduced deterioration
 Less vulnerability to fashion and
technology changes
 Reduction in stockholding costs
 Increase in cash flow

14.  Danger of disrupted production due to non-
arrival of supplies
 Danger of lost sales
 High dependence on suppliers
 Less time for quality control on arrival of
materials
 Increased ordering and admin costs
 May lose bulk-buying discounts