Just in time vs Old techniques

March 24, 2010 at 11:48 pm (Inventory management) (, , , , , )

The most famous stock Management System called Just in Time, where the company tries not to hold stocks but to minimize them. The main role about the issue of distribution played by intermediaries, who are the link between manufacturer and consumer.

Basically the company has to store only what needed. The Japanese say that “the warehouse fits those products we do not need and those who look into their ¨warehouse¨in home they’ll find out  too many useless items. In the Inventory Management system belongs the system is the Just in Time and the system of Just in Case.

This system was well known to the world from the success of the Japanese car TOYOTA. The JIT aims to reduce stocks to a minimum, just keeping security stocks. Many industries fear that many situations can happen and looking forward to maintain high safety stocks and they don’t stop the production. In contrast the JIT theory says to the company does not maintain reserves because it can mean a defective product or to hide a bad supplier. We must be constantly produced good products at the first attempt without errors. Only this will reduce the waste of resources and reduce delays in production.

Just in Time

  • Quantity : Less production
  • Faster processing the orders
  • Relationship with the supplier : Long term
  • Reasonable prices
  • Distribution : Accurate
  • Paperwork : A few
  • Packages : Small pieces etc.

Old techniques

  • Quantity : Mass production
  • Slowing processing the orders
  • Relationship with the supplier : Short term
  • Cheapest prices
  • Distribution : less cost
  • Paperwork : huge bureaucracy
  • Packages : Normal packaging

It is therefore obvious that the JIT is a simple concept. As simple as difficult¡. The JIT requires a coordination between supply and demand, want products to arrive when the company needs them, either before or after, it requires the timing to be perfect, there are no delays or failures.

The philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden causes of inventory keeping, and are therefore not a simple solution for a company to adopt. The company must follow an array of new methods to manage the consequences of the change.





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