THE ADVANTAGES AND DISADVANTAGES OF JUST-IN-TIME

The purpose of  Just in time inventory system is one in which inventory levels are kept extremely low by only producing to specific customers orders, rather than to a forecast of what customers order might be. The key lean principles focus on people, postponement, efficiency, and the elimination of waste.  

 The advantages of just in time production is :
 - minimal amounts of inventory obsolescence.
 - Low inventory levels.
 - eliminate waste.
 - reduce setup time.

 There are also have some disadvantages of just in time production :
 - Excess demand
 - supply disruption
 - input price changes
 - may not be able immediately to get unexpected orders.

          There is an example of using the process of just in time is TOYOTA PRODUCTION SYSTEM(TPS) as a means of eliminating the seven waste. However it was not at the Ford Motor Company that Toyota representatives saw the JIT model in action. When Toyota toured plants in the United States in 1956, Ford had not yet fully implemented the JIT model. It was at Piggly Wiggly, the first self-services grocery chain, that Toyota representatives saw JIT demonstrated and that was the model they based their system on. Three of seven waste categories defined in Toyota Production System(TPS) is overproduction, waiting and excess inventory.

 The seven waste should be avoid :  
 - Overproduction.
 - Waiting.
 - Transportation.
 - Inappropriate processing.
 - excessive inventory.
 - unnecessary motion.
 - defects.

        The conclusion of JIT is an important operational system for manufacturing and supplying companies to adopt and implement. However, it is important to realize that significant competitive advantages can emerge for a firm that utilizes its JIT purchasing function effectively.