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JIT - short version

JIT refers to Just In Time. Just in time is a strategy employed by businesses to reduce stock and thus improve efficiency. Many factors are now set up to supply JIT, which is the process of supplying products in low volumes as and when they are needed. Some manufacturing techniques are not suited to short production runs and so stock has to be kept somewhere in the supply chain, which is usually with the manufacturer.

JIT - long version

Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban (看板, Kanban?) between different points in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT can dramatically improve a manufacturing organization's return on investment, quality, and efficiency.

Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.

For instance, its effective application cannot be independent of other key components of a "lean" system or it can, as its academic founder noted, "...end up with the opposite of the desired result.". In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning), however research of today's leading corporations demonstrates that basing JIT on the presumption of stability is inherently flawed.


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