What is Just-In-Time Manufacturing?

A man stands next to a flowchart diagram

Just-in-time (JIT) is an inventory management concept of synchronizing the arrival of parts with the need for them in the production system so that the material arrives right when required: not earlier and not later - but just in time for the production line to use it.

This concept opposes the approach used in traditional manufacturing, where demand is roughly estimated ahead of customer orders and where production is continuous. As a result, both raw materials and finished products are piling up for when they’re required. That means higher warehousing costs, bigger risks and lower flexibility.

Why does JIT matter?

It pays to implement just-in-time production and stock control within a process to:

  • reduce cost and material waste by minimizing material holding cost and eliminating overproduction;
  • improve the production flow and efficiency by retaining complete control over the process, making you more adaptable to the clients fluctuating needs. Furthermore, since only small orders need making at any time, the process demands less upfront investment, improving the cash flow and posing lower risks. Thanks to better process organization and no downtimes, it’s possible to maximize the return on investment.

Is JIT different from Lean management?

Toyota - the creator of the TPS, or Lean management - was not the only company using JIT. But it did bring it to the world’s attention through its highly increased efficiency, resulting from - among other factors - the implementation of just-in-time. The auto industry giant application of JIT can be summed up with these famous words of Taiichi Ōno, one of their engineers, later turned director:

To produce only what is needed, when it is needed and in the amount needed. Taiichi Ōno

However, just-in-time manufacturing is not the same thing as Lean management. JIT can be, and often is, a part of Lean, but Lean management is a more broad concept. Just-in-time focuses on aligning material deliveries with current production needs, therefore on process efficiency. Lean management uses various methods to reduce waste, but its key objective is the identification of value - as defined by the client - in the process and translating it, and nothing else, as best as possible into the product. So, Lean works on efficiency improvement to better satisfy the clients.

Through that difference, Lean management can cast a wider net on a company’s operations, including customer support, sales, marketing, finance, development, HR, and any other process, whereas JIT only applies to those navigating the order placement - production execution relationship.

Of course, it is possible to translate the just-in-time concept to any process where a dependency between one part of the process waiting for another exists. But strictly speaking, JIT belongs to the manufacturing domain. Still, in terms of looking at the Agile/Lean process management landscape, you will often find the emphasis on flexibility, listening to the changing customer demands, and swiftly responding to that. And the logic behind just-in-time production will usually come up as a piece of related, meaningful information. Knowing and appreciating the various process improvement philosophies and methods will enable you to use the elements valuable to your unique process’ management.

What helps with the introduction of just-in-time to a process?

Although just-in-time is a general concept rather than a step-by-step guide, engaging in specific activities can aid its implementation:

  • Make sure you have the top managers’ approval before investing time into the process changes - it will only be worth it if the implementation sustains;
  • Schedule the ordering and production processes in detail. For planning to be effective, it’s best to use a visual system, e.g., a Kanban board. JIT will not be easy to implement without a system tracking your orders, stock, and production;
  • Enforce standardization of employees’ operations and maintain discipline, to sustain an even flow with each process iteration;
  • Agree on and continuously work on flexible supplier delivery terms.

Can the organization of a just-in-time process be challenging?

By no means is JIT a management model that is easy to achieve and maintain but - arguably - is worth the required effort. Visual management for stock, orders, and production management system is the recommended way to help you keep tabs on the process state and any sudden changes or inefficiencies.

A pair of teammates discuss a problem

One of the difficulties in implementing JIT is aligning the production line’s needs with the suppliers, as their performance and timeliness will strongly impact your implementation’s success. As close an understanding with your suppliers as possible is a must. Another possible problem is dealing with incorrect orders. If the orders contain errors, then due to the short supply chain, mistakes will quickly make it into production, so fixing or changing an order can be impossible. Lastly, in case of an interruption in the supply chain, or a sudden problem with the suppliers, you won’t have anything to fall back on in terms of redundant material piles. As demonstrated by the 2021 worldwide chip shortage, it’s a risk worth taking into account.

Nevertheless, as the just-in-time production process examples of Toyota, Ford, and Dell have shown, taking the challenge can pay off and pay off well.

The key benefits of incorporating JIT into your production process:

  • decreased waste,
  • shorter cycle times, so quicker delivery,
  • better flow efficiency.