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Just in time model


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This is for Mechanical Engineering Prasentation.

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Just in time model

  1. 1. PRESENTATION ON JUST IN TIME MODEL Submitted to: Mr. Rupesh Kumar Submitted by: Suraj Kumar Aryabhatt College Of Engineering AndTechonology
  2. 2. What is JIT ? •“A philosophy of manufacturing based on planned elimination of waste and continuous improvement of productivity ……”
  3. 3. Emergence of JIT • 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.
  4. 4. Functioning of JIT  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.
  5. 5. Functioning of JIT  A method of production control.  No demand - no production!  Anticipated/planned consumer demand triggers 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. 6. JIT Purchasing  Just In Time (JIT) Purchasing Is Directed Toward The Reduction of  Waste (That Is Present At Incoming Inspection, Excess Inventory and Poor Quality)  Delay
  7. 7. Objectives of JIT Purchasing  To Reduce All Non-Value- Added Activities.  Elimination Of In-Plant Inventory.  Elimination Of In-Transit Inventory  Quality And Reliability Improvement
  8. 8. Companies adopted JIT
  9. 9. Some companies, benefited by adopting JIT • 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.
  10. 10. Advantages of JIT  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
  11. 11. Disadvantages of JIT  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