Just-in-time manufacturing (JIT)

Last Updated on 8 September 2023

Just-in-Time manufacturing, or JIT is one of the core philosophies and drivers in Lean manufacturing. It involves changing the production process, so that you produce the right amount of product ‘just in time’ for the customer’s needs. It involves high efficiency, low waste and well coordinated production processes. It utilizes a ‘pull system’ of manufacturing, which is where production is based on customers’ requirements, as supposed to a traditional push system where stock is produced for stock, which is then sold.

What does Just-In-Time manufacturing mean?

JIT is a method of delivering only the necessary inventory to a work center or production line. It reduces the amount of inventory by eliminating non-value-added processes and materials, including excess stocks for safety stock and buffer stock. The idea behind lean manufacturing is to deliver just enough of a product, in just the right quantity and at just the right time.

As you can see from the above definition, this manufacturing system has many benefits: it saves money, increases efficiency and productivity (as there are no unnecessary steps), improves quality control (because parts arrive exactly when they’re needed), minimizes waste by decreasing scrap rates due to poor assembly practices or defective components (because everything is made at exactly the right time), allows faster response times in emergencies like natural disasters where other factories might have closed down due to lack of supplies.

The history of Just-In-time

The concept of Just-In-Time  production, a revolutionary approach to manufacturing, emphasizing efficiency and waste reduction, can be traced back to the early 20th century. While Henry Ford was an early precursor with his assembly line methods, JIT’s modern understanding originated with the Toyota Motor Company in post-WWII Japan. The economic situation fuelled the need for an enhanced production system, leading to the creation of the Toyota Production System (TPS), or lean manufacturing, in the late 1940s. TPS was the foundation for our current JIT manufacturing techniques, focusing on “making only what is needed, when it is needed, and in the amount needed.”

Global recognition of JIT’s effectiveness wasn’t prevalent until the 1970s, spurred by the Oil Crisis’ necessity for production efficiency. The model’s ability to reduce waste, improve productivity, and decrease costs led to its widespread adoption, eventually evolving into sophisticated inventory management systems in the 1990s. Today, JIT manufacturing has permeated diverse sectors, from automotive and tech to consumer goods and healthcare, playing a significant role in shaping the contemporary operational landscape.

Why use Just In Time?

If you manage to move to a Just in Time system, you will:

• reducing the amount of money tied up in finished goods stock
• reduce the risk of finished goods stock becoming obsolete, lowering inventory costs
• less material around which can be lost / damaged
• increased flexibility, as production and materials can be easily changed to other outputs
• Production more focused on customer requirements, reducing their lead time
• improved quality, leading to lower cost of quality and greater customer satisfaction
• less space required, reducing rent and rates costs and simplifying inventory control

When not to use Just In Time?

There are situations when it’s not a good idea to put JIT in place, at least not until these issues are solved

• If you have raw material supplier reliability issues, a delivery failure may cause you to let down your customer
• If you have long lead times for your suppliers (e.g. if you have bespoke parts and/or they are made a long distance away) you will not be able to order ‘when required’
• If you have a high (or fluctuating) defect rate, you might end up with not enough finished goods of a good enough quality to fulfill your order

Push vs pull manufacturing

Just in time involves changing from the ‘push’ production method of traditional manufacturing, where your production line pushes out stock at a consistent rate into a finished goods warehouse, where your customer then can buy what they need, in a ‘supermarket’ type method. It moves to ‘pull’, where customer demands mean that just the right amount is produced at just the right time, and no permanent finished goods stock is required, reducing inventory waste.

It uses the ‘kanban’ system to make this happen, and also requires there to be very little if any waste. The pull system avoids the excess inventory levels that you often get in a push system. 

Is Just-in-Time Manufacturing Risky?

You only need to think back to the pandemic to know that there is risk in JIT inventory management systems. If there are supplier issues, such as during Covid when entire countries stopped exporting, you can find yourself without the inventory needed for production. They key disadvantage of the JIT system is that if your supplier lets you down, your manufacturing processes can be down very quickly. This inventory system may save money on excess inventory and production, but  disruptions to your supply chain can lead to you having idle workers, late shipments and reputational damage.

There are also reductions in risk however. The reduction in inventory on hand reduces the risk of obsolete stock, and the higher inventory turnover means the stock is lying around for less time, when it can get damaged or dirty. You can also focus your production runs on the customer needs, making you more likely to meet customer production targets. You will have to weigh up these risk advantages and disadvantages to see if it is worth it for you organization.