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The Benefits of Just In Time (JIT) For Small Businesses: A Quick Guide – Part 2

How to implement a JIT system

There are a variety of JIT systems available. You could implement a network of small bays within your main production area, or use a fleet of warehousing trucks to receive and store raw materials and shipping material.

One thing to note is that implementing a JIT system can be costly. Suppliers must be prepared to meet a whole host of challenges, such as preventing stock shortages or price markdowns by creating a supply that is no less than adequate to meet the needs of your customers. But with the right system, the costs can be outweighed by significant savings.

The JIT Process Diagram and Steps

just in time system for small businesses diagram

Steps in Cycle of Continuous Improvement for JIT Inventory

  1. Design: The JIT process begins with a review of the essential manufacturing building blocks: product design, process design, personnel and manufacturing planning. Then plans are put into place to eliminate disruption, minimize waste and build a flexible system.
  2. Manage: A Total Quality Management (TQM) review ensures there is continuous improvement throughout the process. A management review defines workers’ roles and responsibilities, defines and measures statistical quality control, stabilizes schedules, and checks out load and capacity schedules and levels.
  3. Pull: Educate the team on production and withdrawal methods using signaling methods like Kanban. Review lot size policies and reduce lot sizes.
  4. Establish: Vendor relationships are vital to the success of JIT. Review vendor lists. Settle on preferred suppliers, negotiate contracts, discuss lead times, delivery expectations and usage metrics and measures. Learn how to make the most of them in the supply chain.
  5. Fine-tune: Determine inventory needs, policies, controls and reduce inventory movements.
  6. Build: Inform your team about the skills and capabilities it needs to complete its work and conduct team education and empowerment sessions to educate them.
  7. Refine: Reduce the number of parts and steps in production by refining, standardizing and reviewing the entire process.
  8. Review: Define and implement quality measures and metrics and conduct a root cause analysis of any problems. Emphasize improvements and track trends to improve every aspect of JIT.

JIT Inventory Methodology

The JIT inventory methodology uses a variety of techniques to smooth operations. The lean method focuses on optimizing organization, paying attention to detail, having small lot sizes, increasing transparency, fostering cell manufacturing and using a pull (rather than push) approach.

Techniques Involved in JIT Inventory Methodology

  • Order: Maintain a high level of physical and organizational discipline.

  • Better Quality: Eliminate defects through attention to detail and continuous improvements.

  • Reduced Setup Time: Create flexible changeover approaches when setups need to adjust to meet customer demand.

  • Small Lot Size: In JIT, one is the ideal lot size. The small size reduces in-process inventory, carrying costs, storage space, and makes for easier inspection and rework.

  • Load Uniformity: Leveling is a control mechanism that achieves a stable, level daily schedule.

  • Flow Balance: Flow scheduling organizes throughput for even distribution of energy and labor.

  • Diversified Skills: Cross-trained workers can be deployed to different areas to keep production moving.

  • Visibility for Control: Using communication tools, like those found in Kanban, keeps the entire team informed of inventory levels.

  • Ongoing Maintenance: Ongoing oversight and focus on detail, including the machinery and tools the business uses every day, helps maintain a low defect, low problem environment.

  • Use Fitness: JIT spaces designed to fit each process speeds up production. One workstation pulls output from the one before it, as needed, based on a master schedule or customer demand.

  • Logical Plant Layout: Product-oriented design makes assembly easier and more efficient.

  • Strong Supplier Network: Strong relationships with vendors make JIT inventory most effective.

  • Worker Immersion: Every team member should be dedicated to the process and colleagues to achieve JIT goals.

  • Cell Manufacturing: Create an environment where groups can work as quickly as possible to make as many products as they can and limit the waste they create.

  • Pull System: The process of only replacing products once they’ve been used in production.

Conclusion

Here, we’ve outlined the many benefits of just-in-time inventory (JIT) that every small business can benefit from. By practicing the lessons from this guide, you can implement a more streamlined system for your own business.

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