T he practical difficulties arising from the implementation of a Just-in-Time (liT) inventory management approach have caused some managers to dismiss it as a passing fad. When asked to cite the inventory strategies that do and do not work for their companies, purchasing managers identified JIT as the most frequently mentioned failure. Their general sense was that modified JIT works, pure JIT does not. The success of JIT implementation may also be a function of the size of the company, with smaller firms finding it more difficult. If JIT is abandoned because it does not appear to work as described in articles and textbooks, the cost savings of an efficient, integrated manufacturing process will be lost. As documented here, the solutions of actual companies in response to the impediments of introducing JIT in its purest form may be instructive for other firms facing similar problems. The popularity of JIT inventory methods has grown steadily over the last two decades. Officially introduced by Toyota in the 1970s, JIT methods have spread to manufacturing companies all over the world. The appeal lies mostly in an emphasis on simplicity and a cost-saving, bare-bones approach. Researchers generally agree about JIT on several points, one being that JIT methods, with some alteration, can be successfully adapted for use in American manufacturing plants of all sizes. Setting up a JIT system, however, inw)lves the entire business, from suppliers to production to customers---even to administrative aspects such as accounting. There may be significant disadvantages with the system, such as uncooperative suppliers, the distance between suppliers and manufacturers, and overstressed workers. On the other hand, the benefits to be realized include less need for maintaining safety stock, a lower lead time, higher quality, automated communication with customers, and cross-training for workers. A JIT approach has as its main goal the reduction of the levels of inventory and its associated carrying costs--or to reduce waste altogether. The less time a product is in process, the less inventory there is to finance, store, and manage. The objective is to push to zero the amount of time the product is waiting to be worked on, in transit, and/or being inspected. Benefits that should result from the implementation of a JIT system include: • lower inventory carrying costs; • space and cost savings in the factory and warehouse; • reduced risk of obsolescence; and • reduced response time to customers' orders and delivery times. To the extent that the JIT system can be put into practice without any impediments, a theoretically correct demand-pull system will be in place. JIT in theory often differs greatly from JIT in practice. Not all companies can continuously feed inventory into work-in-process and manufacture their product without interruption. Different industries have different manufacturing processes that, for varying reasons, are not suited to JIT treatment. This does not completely rule out the possibility for the company to practice JIT; it just means it has to find a way to adapt or adjust its processes to incorporate as many JIT principles as possible. To examine how different manufacturers have adapted JIT to fit the needs of their compa-
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Jan 1, 2010
Aicha Amrani + 3
Open Access
