Higher Business Management - Just-in-Time Manufacturing

Just in Time originated in Japan during the 1960s and involves keeping stock levels to a minimum. Stocks arrive just-in-time to satisfy production needs. Raw materials are not purchased until they are required and finished goods are not produced unless firm orders have been received.

To be successful JIT techniques depend upon the reliability of an organisation’s suppliers, access to a supply of highly skilled workers and good quality control procedures.

Advantages-It improves cash flow since money is not tied up in stocks

-The system reduces waste, obsolete and damaged stock.

-More factory space is made available for productive use.

-The costs of stock holding are reduced significantly.

-Links with and the control of suppliers are improved.


Disadvantages-A lot of faith is placed in the reliability and flexibility of suppliers

- Increased ordering and admin costs

- Advantages of bulk buying lost

- Vulnerable to a break in supply and machinery breakdowns

- Difficult to cope with sharp increase in demand

-Possible loss of reputation if customers are let down by late deliveries