Just in time

Just-in-Time Production (JIT) and Kanban Systems

Just-in-Time (JIT) production and Kanban systems are powerful inventory control systems that help businesses in achieving continuous growth through carefully planned production and minimal inventory levels and on time delivery of finished goods to customers when they are needed. Let’s explore these concepts.

What is JIT?

Just-in-time (JIT) manufacturing is a production strategy that is designed to minimize inventory and increase efficiency. It achieves this by focusing on producing goods only when there is a confirmed demand, typically a customer order. By doing so, JIT not only makes the production process flow smoothly but also reduces waste and inventory levels across the production process and finished goods warehouse.

The Core of JIT: Just What's Needed, Just When Needed

Just-in-Time (JIT) manufacturing revolves around a simple principle: “Produce only what is required, exactly when it’s needed.” This is achieved through a pull system, where production is triggered by confirmed customer orders which pull materials and goods through the production process all the way to the raw material suppliers and then through every step.

Just-in-Time Inventory Management and Raw Materials

JIT inventory prioritizes efficient resource allocation. JIT manufacturing emphasizes maintaining minimal levels of raw materials. This reduces storage requirement, warehousing and associated costs, ensuring reduced costs and greater effficiency. However, this doesn’t translate to a shortage of materials as demand is well undderstood and material requirements properly planned and communicated.

Through strong supplier relationships, JIT guarantees a steady flow of raw materials arriving precisely when needed for production. This not only eliminates the excessive inventory holding and warehousing costs but also prevents any disruptions in the supply chain.

Production Schedules and Quality Control

Just-in-time emphasizes strict quality control because any defects or errors can disrupt the entire production flow and cause delays and work in process build up. JIT emphasizes strict quality control because any defects or errors can disrupt the entire production flow. It offers accurate and detailed production schedules to maintain a smooth performance, delivering the final product on time and as expected.

Continuous Improvement

Just-in-time lean manufacturing is all about Continuous improvement. It makes manufacturers constantly evaluate and refine their processes so they can identify and eliminate inefficiencies. Less breakdowns, inefficiencies and wasted time and movements allow for a leaner inventory level between each process step and finished goods.

How does just-in-time work?

In the JIT system, production happens only when there is a confirmed customer order. A customer first places an order with the manufacturer. The manufacturer then checks its inventory and places orders with its suppliers for only the exact amount needed to fulfill the customer’s specific order. On receiving the order, the supplier promptly supplies the required material in the required quantity. Finally, the manufacturer assembles the raw materials and sells the final product to the customer.

Kanban: A Visual Companion to JIT

Kanban provides a visual system to manage workflow and inventory levels within the JIT framework. Kanban uses physical or digital boards and cards to represent the production workflow. These cards act as signals for production or material replenishment, preventing unnecessary work and clutter.

Kanban Boards and Cards: A Visual Management System

Kanban’s magic lies in its simplicity and effectiveness. It uses a visual approach to manage workflow and inventory levels, providing real-time insights into the production process. Here’s how it works:

Kanban Boards: These can be physical boards (whiteboards, magnetic boards) or digital platforms. The board serves as a central hub, displaying the workflow stages through Kanban cards.
Kanban Cards: Each card represents a specific task or work item within the production process. The information on the card can vary depending on your specific needs but typically includes a brief description of the work item represented by the card. For tasks involving materials, the card might also indicate the quantity needed

Kanban in Action: Signaling Production Needs

One of Kanban’s core strengths lies in its ability to manage inventory levels efficiently. Kanban cards act as visual triggers for production needs. Each card typically has a designated quantity associated with it. When the quantity of a material or task represented by a card falls below a predetermined level (reorder point), it becomes a signal to initiate production or replenish the inventory.

The “Pull System” vs. Traditional “Push” Production:

The Kanban system adopts a “pull system,” where production or replenishment happens only when there’s a demand signal triggered by a Kanban card reaching its reorder point. This approach contrasts with traditional “push” production methods. In a push system, production is based on forecasts and may lead to overproduction, creating excess inventory.

For a clear understanding of the Kanban system, imagine a Kanban card representing a specific raw material needed for production. The card has a reorder point of 10 units. When the remaining inventory of that material dips below 10, the Kanban card acts as a signal to trigger a new production order or initiate the process of restocking the stock from a supplier. This ensures there’s enough material on hand to fulfill upcoming production needs without creating unnecessary stockpiles.

Benefits of JIT and Kanban

Both JIT and Kanban offer significant advantages:

Reduced Inventory: By producing or restocking materials only when needed, JIT and Kanban systems ensure lower inventory holding costs and improved cash flow.
Increased Efficiency: These systems allow manufacturers to focus on fulfilling confirmed orders, leading to shorter lead times. With an updated production line, customers receive their goods faster, and production schedules become more responsive to changing market conditions.
Improved Quality: With their emphasis on producing goods as needed, these systems focus on quality control. With less inventory in the system, there’s less opportunity for defective products to go unnoticed, so no accumulation over time.
Enhanced Visibility: Kanban boards provide real-time insight to help businesses proactively manage workflow, identify bottlenecks, and optimize their workflow accordingly.
Greater Flexibility: These systems allow for real-time adjustments to production based on actual demand. For example, if customer demand changes, production can be adapted quickly by managing the flow of Kanban cards.

JIT and Kanban require careful planning to ensure you have the right amount of supplies on hand. Collaboration with suppliers is key. When JIT and Kanban work together smoothly, production flows perfectly, there’s minimal waste, and your company remains competitive in today’s dynamic market!