A coursework for Just In Time (JIT). Graded - 70%.
TASK:
Essay Question 3:
In no more than 1000 words, discuss how JIT (Just In Time) can be applied to a building company. You should ensure that your essay makes reference to the following:
• How JIT can be applied.
• Potential benefits from JIT implementation.
• Potential issues with JIT implementation.
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Just In Time
1. Student ID: 5446890
1
JUST IN TIME
Just In Time or JIT has been defined as the ‘strategy companies employ to
increase efficiency and decrease waste by receiving goods only as they are
needed in the production process, thereby reducing inventory costs.’
(Investopedia.com, 2003). JIT system’s relation to the construction industry is no
different to other industries as all industries aim to produce a product and
deliver it to the end users.
^(Whiting Corporation, no date) (R. Rodgers, lecture 11, slide 19, 239SAM accessed via CU Moodle)^
In lecture 11 of the 239 SAM - Global Supply Chain Management module, we looked at the
difference between traditional approach and just in time approach. The difference lies in
utilisation. With simple steps like ‘fewer stoppages’, ‘low inventory’ and ‘focus on producing
only when needed’, a technique that a building company could implement in the building of
housing as well as other infrastructure project e.g.
roads, large scale public venues.
The origin of Just In Time, alongside with Jidoka -
‘automation with a human touch’ (TOYOTA MOTOR CORPORATION GLOBAL
WEBSITE, no date) comes from the Toyota Production System
(TPS). The TPS focuses on Quality, Cost, Delivery,
Environment and Safety that are implemented
through JIT and Jidoka, with thinking people system
where everyone is able to share their ideas and the 5
Why’s & 5 ‘S’. In it’s base TPS focuses on Heijunka,
Kaizen and Standardisation. The base words translate
into: Level Scheduling & Continuous Improvement.
(Toyota Heftruck, no date)
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Potential Drawbacks
The main difficulty of JIT’s application into the building companies comes from the time
required to fully implement/integrate the system and the fact that many of the so-called
veteran workers within the companies may disagree with the change in systems. Senior
management in both Small Medium Enterprises (SMEs) and large companies must be certain
that they want to implement JIT system into their business and that they spread it across
from senior levels all the way down to lower levels of the labour force.
(Rio 2016 logo, no date)
Building materials are saleable, they could be significantly damaged from poor
weather conditions, they take time to be put together in the construction
of a project and in order for building companies to save time, they prefer
to hire from their partners and strategic alliances. On average, a UK
building firm would have partnerships with over 600 companies
(BusinessesForS, 2015), associations range from human resources to plant and
equipment. It is very important that building companies like the ‘FTSE-
100 construction group, Balfour Beatty’(The Telegraph, Ruddick, 2011) (which was
in charge of building the site for the 2012 London Olympic games, along
with their partners) can all jointly implement the Just In Time system.
Because, if exact or similar standardisation is not spread across all companies, the project
may end up not only costing more, but also risking failure to meet the deadline. The 2012
Olympic bridges & highways, for example, ended up costing ‘£12 million’ (Costs and spending
breakdown of the 2012 London Olympic games - a freedom of information request to government Olympic executive, 2015) more than
expected in 2011 and were not completed on time. A similar drawback trend of JIT that we
are currently observing with the 2016 Rio Olympic Games, is where more than ‘800 families
(90% of the original population of Vila Autódromo) (Watts, 2015) have had to leave their homes, a
figure which was not meant to exist according to the official 2016 Olympics sustainability
management plan. (RIO 2016 (2013) Sustainability management plan: Rio 2016TM Olympic and Paralympic games, 2013).
In terms of potential benefits, the rightly implemented Just In Time system could have a
very positive impact on sales of a company. The Toyota Way (Liker, 2004) teaches businesses to
take full potential of its human capital and assets and looks for ideas from all teams, from
board directors to interns. The Toyota led the concept aims to inspire productivity and
creativity. In order for JIT/TPS to work, a building company would need to preferably
combine the system with clean workspaces. TPS and JIT are directly
linked with Lean production which is defined as an ‘An approach to
management that focuses on cutting out waste, whilst ensuring
quality.’ (Lean production (revision presentation) | Tutor2u, 2015) An approach, that
could be integrated across all parts of a business, spreading across
all the way from design to production and distribution.
(Brick & Stone Suppliers, no date)
3. Student ID: 5446890
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In addition, a building company may benefit from the following advantages:
• Lower stock holding = reduction in storage space = saving space = rent and insurance
costs
• Stock is only obtained when needed = less working capital
• Reduction of likelihood of stock perishing = stock does not become out of date
• Less time spent on checking and fixing production issues = limited waste = getting the
product right first time round
(Mirza, 2014)
There are a number of examples of successful Just In Time systems, from automotive and
information technology to construction industries. JIT’s plays a key part of Toyota, Dell and
Harley Davidson’s principles. Harley Davidson for example, has had its ‘inventory levels
decreased by 75 per cent’ (Shaikh Emad Gohar - CMA, no date), resulting in saving more space and
reducing rent and insurance costs. JIT is not only about inventory reduction, but about
optimal efficiency. Going back to Dell, their IT equipment is only produced after an order is
placed. Despite the fact that it is customised, they gain a competitive advantage of giving the
customer what they want, when they want it. Therefore, brand loyalty and sales have
plummeted and accounting for revenue over ‘450 million USD’ and a steady increase in
global market share from 14.9 percent to 17.7 in between 2013 and 2014. (Dell - statistics & facts,
2015)
Overall, JIT systems could be implemented
across most industries and especially the
construction industry, so long as the entire
hierarchy follows and that not only the
contracted company, but also its sub-providers
and suppliers follow the same principles.
(The Yellow Building Company, no date)
4. Student ID: 5446890
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