Businesses regularly struggle with underproduction and overproduction. This happens when companies try to guess what customers want to buy rather than take a factual approach. This guesswork is done way ahead of time.
Based on the guesswork or past sales data, they usually end up manufacturing products in bulk. You must know that this guesswork doesn’t always work. Sometimes the manufacturers guess right, but often the guess goes wrong.
This leads to tied-up capital, increased inventory costs, etc. This is when the approach, Just-in-Time, commonly known as JIT, solves these problems. How? By connecting what customers buy with what companies make in real time.
Understanding Just-in-Time Production
JIT is a simple approach that involves aligning the demand with production.
You can better understand the concept by understanding these three simple rules.
- First, make exactly what customers order. It means no substitutions! If customers require 100 red shirts, make only 100 red shirts. Don’t go for extras or alternatives.
- Second, make it when customers need it. This centres around timing. Don’t ignore the fact that timing matters. Manufacture products only when or closer to when customers will require them.
- Third, make the exact amount that customers want. It’s about making the right amount.
Aligning Manufacturing with Demand
This is what JIT brings to the manufacturing floor.
Connecting Customers to Production
When customers place orders, factories get the message right away. This direct connection means factories make exactly what customers want.
Traditional manufacturing has many overwhelming steps. The typical approach involves customers placing orders with the salespeople, who further pass them to planners.
Planners inform factories, and then the manufacturing starts, making the entire process time-consuming.
On the contrary, JIT focuses on making only what customers truly want—nothing more, nothing less. It begins with understanding the customer-defined value in Lean manufacturing, which is the core of all waste elimination.
Using Pull Instead of Push
Traditional manufacturing employs push systems. Manufacturing follows a schedule, pushing products through the system, whether or not the customers require them, filling up the finished goods warehouse.
Just-in-Time manufacturing, on the other hand, uses a pull system. Products are pulled through the system only when the customers place orders for them.
Matching Customer Timing
Matching customers’ buying time is extremely crucial. Old manufacturing often ignores these patterns. Manufacturing units produce products only when it’s convenient for them, creating a problem when products are ready at the wrong time.
JIT ensures manufacturing units work according to customers’ timing and patterns and deliver accordingly. However, businesses must train their staff to speed up or slow down according to the order influx when implementing JIT.
Making Small Amounts Often
Large manufacturing units often produce large quantities, all at once, since it seems more efficient. The problem in this case is the delay between making products and delivering them to customers.
JIT, on the other hand, advocates manufacturing small quantities but more often. Instead of making 1000 products per month, JIT makes 50 every day (assumed stats). This keeps production close to customers’ demand at the moment.
Here’s why small amounts work better:
- Quality problems are found faster because fewer products are affected.
- Factories can change to different products more easily.
- Customers get their orders quickly because production cycles are shorter.
Responding to Changes Quickly
New trends are constantly evolving, and so do the customers’ demands. Besides, competitors continuously make efforts for a competitive edge. Economic conditions changing the buying patterns cannot be neglected. Considering all these conditions, manufacturing units need to equip themselves and respond to these changes fast.
So, how can JIT help businesses handle such situations? JIT manufacturing witnesses customer orders constantly. Digital systems track what customers are buying and how patterns change. When the demand fluctuates, manufacturing units can adjust within hours or days instead of weeks or months.
Making JIT Work: How to Practice it?
- Building a Relationship with Suppliers
Suppliers are an integral part of the manufacturing process. JIT production voices for suppliers who can deliver materials quickly and often in small quantities. Typical supplier relationships involve delivering raw materials once a month.
These suppliers must be located close to the manufacturing units, with the ability to process variable quantities faster. It’s commendable if they use JIT principles for themselves as well.
Ensuring all this makes the supplier a partner rather than just a vendor.
When a supplier enters the loop, companies share information with them about orders and production plans. This facilitates the supplier’s preparation for changes without requiring them to build extra inventory.
- Train Workers
JIT manufacturing works well when the workers are trained enough to perform various jobs and adapt to quick changes.
For Instance, if an immediate order is received, staff should respond without frustration. This level of professionalism can be achieved through proper training and resource allocation.
With such flexibility, factories respond to demand changes without being limited by worker skills.
- Ensure Quick Machine Changes (SMED)
Machine switching between different steps of manufacturing and for different products should be fast. This involves new tools, better procedures, and worker training.
With this skill, companies can reduce setup from hours to minutes, as fast setup makes it possible to change products without losing time and efficiency.
- No Compromise Over Quality Control
JIT production has no extra products to replace the defective ones. Therefore, JIT ensures every product is made right the first time. This requires quality control throughout the process, not just at the end.
Trained staff must check quality as they work and fix problems immediately when spotted. This also requires maintaining the machines to prevent defects beforehand.
On the suppliers’ end, the provision of good-quality material becomes crucial. Quality assurance requires everyone to be responsible for maintaining quality.
Results When It Works: Final Words
Just-in-Time manufacturing is a key component of Lean manufacturing, aiming to align production with actual demand by supplying only what’s been ordered. It emphasizes efficiency, productivity through continuous improvement, and minimizing waste across the entire supply chain.
It also helps companies face less financial strain in terms of less capital being tied up in inventory, as money stuck in unsold inventory becomes available for R&D, smaller warehouses, less waste, and lower inventory cost.
With JIT, companies become more responsive to sudden orders and market fluctuations. It enables businesses to quickly adapt to new customer preferences, competitor actions, and market conditions, allowing them to gain a competitive edge.
So, if you have dealt with overproduction, underproduction, or dissatisfied customers, it’s the right time for you to align your manufacturing with demand by implementing Just-in-Time.
