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Just-in-time (JIT)is an inventory strategy that strives to improve a business’s return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals between different points in the process, which tell production when to make the next part. Kanban are usually ‘tickets’ but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT can improve a manufacturing organization’s return on investment, quality, and efficiency.
Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.
For instance, its effective application cannot be independent of other key components of a lean manufacturing system or it can “…end up with the opposite of the desired result.” In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning), however some research demonstrates that basing JIT on the presumption of stability is inherently flawed.
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