Just In Time

Just In Time (JIT) is a Manufacturing Method that consists on Optimizing the Resources necessary for the Production of goods.

• It was invented by Toyota in the 1960s.

 

These Resources are basically:

• The necessary Components and Materials.
• The final Products manufactured.
• The Time employed.

 

To do so, it relies on 3 main pillars:

• Using only the materials necessary for the manufacture of the Goods.
  • Minimize Stocks of Raw materials and Components.
• Having a good and fluid relationship with Suppliers.
  • So they can provide the necessary materials when you need them.
• Manufacture on Demand.
  • Without producing Stock.

Just-in-time manufacturing tends to encompass different practices.

This makes people wonder what really is Just in Time?

 

According to our experience, a Just In Time Process is characterized for:

 

Track and Optimize every Process: Analyzing them carefully.

• Manufacturing Processes are Optimized as much as possible.

 

Plan in Advance: Production days are designed to produce a certain amount of Products.

• JIT Manufactures over Demand so Productions are Perfectly Scheduled.

 

Cost Optimization: JIT tends to focus greatly on Cost cutting.

• Usually by analyzing every Material employed and Cycle times.

Just In Time Scheme

 

Now, before sharing some examples with you, we want to explain you what the opposite of Just In Time is.

• This way, you’ll better understand why not all companies use it.

 

The opposite to a JIT Process is called a Just In Case (JIC) Process:

 

Imagine a Company that:

• Buys Raw materials when they are cheap.
  • Not when they strictly need them.
• Produces just for Producing.
  • And it assumes that all of its products will be sold.
• Has different Stocks and Inventories.
  • One Stock for Raw Materials, another stock for finished Products, etc.

 

These Companies have a Just-In-Case Manufacturing Process.

 

It seems very risky to produce in this way but lots of companies do it.

Why?

 

Which companies don’t need Just It Time?

 

There are many successful companies that do much better with a Just In Case manufacturing process rather than a Just In Time process.

Which type of companies?

 

Companies that Manufacture Commodities:

• Oil.
• Aluminum.
• Steel.
• etc.

For these products, Raw materials account for a large part of the total cost.

• Buying cheap Raw materials is more convenient than producing over demand.

 

Companies that Manufacture Highly-demanded cheap Products:

• Drinks.
• Pencils.
• Sports equipment.
• etc.

These products have a very High Turnover.

• Mass-Manufacturing them is the best way to reduce Costs.

The best way to understand the Just In Time method is by sharing some examples with you:

We’ll now share 4 Real examples of Just In Time manufacturing.

• And Why these companies implemented this Process.

 

Some of these examples come from our own professional experience.

 

Let’s begin:

 

The Automotive Industry is the “father” of this Manufacturing Process.

• That is why it is the most competitive (and difficult) industry.

 

In an Automotive manufacturing line:

• Pieces arrive Sequenced at the Manufacturing line.
  • The corresponding part for its respective car.
    • Each piece belongs to a “car with name”.
• There are no Stocks.
  • If there is a problem with a piece, that car will be moved away.
    • And the Production continues with the next cars.
• Each Manufacturing Process is extremely Analyzed.
  • Every amount of time consumed is optimized.
    • So the Production line can build the maximum amount of cars possible.
• Productions are scheduled weeks and even months in advance.
  • There are entire departments dedicated just to scheduling Productions.
    • And coordinate it with suppliers.

 

This is the reason why cars with dozens of different customizations can now be offered.

• Because Automotive companies don’t need to store millions of different pieces.
  • They manufacture your car, just for you.

 

Although the manufacturing Process in a Marble company is not as sophisticated as it is in an Automotive Manufacturing line, it has implemented certain Just In Time procedures over the years.

 

In the past, Marble companies offered few products that were mass produced.

• They had what they had.
• • And people bought it without complaint.

 

Their day to day consisted on:

• Extracting Marble from the Quarry.
• Saw it in slabs.
• Offer them to the Public.

 

But, over the years, People began to demand New Products:

• New Marbles, different colors, Granite, etc.

They wanted to have a different kitchen countertop than their neighbors had.

 

Nowadays, Marble companies:

• Receive an order.
• Extract or Buy the Marble (or granite) their Clients want.
• Saw it.
• In case they have an excess of production, they store it.

 

* These “Clients” are often marble workers or Construction companies, not end Customers.

• If you only want a single slab for your countertop, of course they won’t mine a block just for you.

 

This example is a bit strange.

But it perfectly exemplifies what a Just In Time process is.

 

If you think about it carefully, a Restaurant can be a good example of a Just-in-time business.

Why?

When you go to a Restaurant (not a Fast food Restaurant):

• They Prepare what you order.
• You have to wait before they prepare your dish.
• They don’t throw away “prepared dishes”.
• The process is intended to “Manufacture“ on demand.

 

In Fast Food Restaurants, they usually follow a Just In Case Process:

• They prepare Big Pizzas in advance so you can buy a portion.
• They have lots of Fried Chicken ready to be consumed.
• They have the most popular burgers already cooked.
• They have French fries (chips) in a “hot zone” that can be served immediately.

Why?

Because they know these product will have a strong Demand.

• They just don’t wait for someone to ask for it: Serve Fast is the Priority.

That is why it is called “Fast Food”

 

And, at the end of the day, they throw away the prepared food that has not been sold.

• We say “prepared food” because all Restaurants throw away some Raw materials, waste, etc.

 

Furniture is another Business that can be better understood if you know Just In Time Processes.

 

There are 2 types of Furniture companies:

• The High quality ones.
• IKEA.

Everything in between is doomed.

 

If you buy a good Furniture piece from a High quality company:

• The company will produce this item just for you.
• You’ll have to wait 1 – 2 months.
• They will probably tailor it for you.
  • A library a Closet, etc.

They follow a Just In Time Process: They Manufacture over Demand.

 

What do IKEA do? IKEA follows a Just In Case Process.

• IKEA manufactures before its Customers enter one of its Stores.
• Its reduced costs come from producing the same products for the entire world.
• They keep big stocks that are distributed all around the world.

IKEA don’t wait for your order: They have already manufactured the Furniture you need.

 

* Let’s clarify one thing: IKEA is a wonderful company, but, its furniture is not intended to last for decades.

• That is nothing bad; Their Quality/Price is unbeatable.

In fact, half of my furniture is from IKEA.

Just In Time is a Manufacturing Method that consists on Optimizing the Resources necessary for the Production of goods.

It relies on 3 main pillars:

• Using only the materials necessary for the manufacture of the Goods.
• Having a good and fluid relationship with Suppliers.
• Manufacture on Demand.

 

A Just In Time Process is characterized for:

• Track and Optimize every Process: Analyzing them carefully.
• Plan in Advance: Production days are designed to produce a certain amount of Products.
• Cost Optimization: JIT tends to focus greatly on Cost cutting.

 

The Opposite to a Just in Time Process is a Just in Case Process.

It consists on:

• Buy Raw materials when they are cheap.
• Produce just for Producing.
• Have different Stocks and Inventories.