Organizations that need to function in a constantly evolving and growing dynamic market have begun paying extra attention to their supply chain operations to sustain a competitive attitude. Thus, logistics management has recently become a significant resource for increasing the industries' competitiveness.
Logistics strategy can be described as the process of preparing, executing, and controlling the effective distribution and storage of products, services, and information from the point of origin to the point of consumption to satisfy consumer requirements and achieve the goals of the company. A company's logistics strategy can be customer-centered, product-centered, or even destination-specific. Each company's supply chain is vigorous and growing. An organization or company's adopted logistics strategy identifies the various levels of service that are the most cost-effective and productive of the logistics used by the organization.
Just-In-Time (JIT) is a resource control strategy intended to reduce production expenses and growing investment returns. It is a strategy based on efficiency improvements achieved by waste reductions, through acquiring inventories of products as needed in a production process, rather than previously. It can also be called the Toyota Production System (TPS). In the event of increased demand, the earlier "just-in-case strategy" included manufacturers moving huge inventories. The JIT varies from the older Just-in-Case approach because of its lack of safe storage and low inventory ratios. The reduction in inventory costs will, therefore, naturally improve performance. Therefore, this approach requires producers to estimate their demand appropriately.
JIT is a principle of operations administration found in Japan and credited to Toyota. The precise origin is unknown; however, it is considered to be functioning in Japan before World War II. The country was reestablishing the limitations of cash scarcity to fund large-scale production, a shortage of land to construct factories and store inventories, and lastly, a lack of natural resources. The Japanese needed to reduce their operations because of these restrictions by constructing smaller factories and maintaining just as much inventory as was necessary for a factory and achieving fast return on capital for the chance to buy additional materials.
Among the essential approaches applied in the Toyota Production System (TPS) is the JIT strategy. In JIT, products are produced based on customer demands and expectations and are developed only after that, rather than supplying the customers with the products already made and in storage. JIT program focuses on delivering the necessary quantity to the customers at the required time. As a consequence, JIT reduces the amount of loss that may arise in the industry owing to the storage of manufactured goods, defective products or pieces, and also goods lined up in the production lines.
In JIT, the number of required goods to be produced lined up in the assembly line could be minimized by processing just the necessary amounts in limited loads and supplied for the production process to the assembly lines. This method serves to reduce the volume of produced defective components. The whole JIT definition differentiates itself from conventional production processes utilizing push versus pull processes. The push method pushes resources to the next production stage, not minding if resources and time are required at that stage, generating tons of finished goods at each step of the production process (Kaluarachchi, 2009). The well-known production companies follow a push method where they manufacture and operate progressively. Pull mechanism is when the products are pulled to the next production level only when the next production stage signals or needs it. This reduces the product stored significantly, as it will not keep a project running. The JIT method centers on the pull manufacturing method that reduces total inventory.
Main Components of Just In Time
● All job areas provide the exact volume of workload by consistent routine operation, and approximately the precise product mixture generates at the production lines. This allows the use of a standardized production schedule to manage the stock required at the production lines effectively.
● Manufacturing setup times can be decreased to one digit, which is lower than 10 minutes. It is achievable through effective production planning and redesigning of manufactured goods.
● There are complications, disturbances, and expenses each time a procedure shifts, or it moves from producing one commodity to creating another. JIT claims these changes lay waste to resources and therefore, should be removed.
● The production level has to permit smooth and consistent product flow through the method. Every aspect of the process should be wholly exploited so that the technique may be an excellently-balanced production line.
● Product supplies are delivered straight to the production line as at when needed. Suppliers are required to be accustomed to this type of operation.
● The lead times have to be short, or the lag in response to a material request is prolonged. It involves collaborating with distributors and even making hem construct close facilities
● Since there aren't stocks for providing protection, any flaws with materials will interfere with production. Workers of a project have to be prepared to locate the source if anything goes awry, take action required to fix the mistake to ensure sure it doesn't occur again. It involves a professional and versatile staff dedicated to the organization's progress.
A well-planned application of Just-in-time strategy can provide significantly enhanced collaboration and staff engagement, as the company operates together to identify waste areas and to tackle and figure out ways of reducing waste in that region (Slack, Chambers, & Johnston 2007). It helps in providing a simplified product control system, and also the business procedures associated with product management. Supplier connections and business data are employed to recognize particular areas where improvements to the product are needed.
JIT strategy can have a significant effect on a business. There are, however, other uncertainties involved with the attempt to incorporate production techniques of JIT. It seems to be quite basic, quick, and straightforward when looked at. In truth, it's a rather complicated strategy that demands a commitment of a long period and an upfront cost that doesn't guarantee success. For the organization, the most crucial thing is to have an effective coordinated allocation of resources. The management and staff also need to take into account that this idea will help the company overcome specific logistics problems.
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