Just in Time Concept

ASSIGNMENT 2

Just In Time (JIT) is a system whose objective is to produce or to procure products or components as they are required by a customer or for use, rather than for stock. A just in time system is a “pull” system, which responds to demand, in contrast to a “push” system, in which stock act as buffers between the different elements of the system, such as purchasing, production and sales.

When Companies use Just in Time (JIT) manufacturing and inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases are zero. Just In Time (JIT) approach can be used in both manufacturing and merchandising companies. It has the most profound effects, however, on the operations of manufacturing companies which maintain three class of inventories raw material, work in progress, and finished goods. Traditionally, manufacturing companies have maintained large amounts of all three types of inventories to act as buffers so that operations can proceed smoothly even if there are unanticipated disruptions. Raw materials inventories provide insurance in case suppliers are late with deliveries. Work in process inventories are maintained in case a work station is unable to operate due to a breakdown or other reason. Finished goods inventories are maintained to accommodate unanticipated fluctuations in demand. While these inventories provide buffers against unforeseen events, they have a cost. In addition to the money tied up in the inventories, expert argue that the presence of inventories encourages inefficient and sloppy work, results in too many defects, and dramatically increase the amount of time required to complete a product.

The main benefits of just in time manufacturing system are the following:

1. Funds that were tied up in inventories can be used elsewhere.

2. Areas previously used, to store inventories can be used...