PRESENTATION ON

JUST IN TIME MODEL

Submitted to:Mr. Rupesh Kumar

Submitted by:Suraj Kumar

Aryabhatt College Of Engineering

And Techonology

What is JIT ?

•“A philosophy of manufacturing based on planned elimination of waste and continuous

improvement of productivity ……”

Emergence of JIT

• Evolved in Japan after World War II, as a result oftheir diminishing market share in the auto industry.

• Toyota Motor Company- first to implement fullyfunctioning and successful JIT system, in 1970’s.

• Japanese Manufacturers looked for a way togain the most efficient use of limited resources. Theyworked on "optimal cost/quality relationship.

Functioning of JIT

Involves keeping stock levels to a minimum

Stock arrives just in time to be used in production

Works best where there is a close relationship between manufacturer and suppliers

Goods not produced unless firm has an order from a customer

Aims to get highest volume of output at the lowest unit cost.

Functioning of JIT

A method of production control.

No demand - no production!

Anticipated/planned consumer demand triggers production

Finished goods assembled just in time to be sold to customer

Component parts assembled just in time to become finished goods

Materials purchased just in time to make component parts.

JIT Purchasing

Just In Time (JIT) Purchasing Is Directed Toward TheReduction of

Waste (That Is Present At Incoming Inspection, ExcessInventory and Poor Quality)

Delay

Objectives of JIT Purchasing

To Reduce All Non-Value-Added Activities.

Elimination Of In-Plant Inventory.

Elimination Of In-Transit Inventory

Quality And Reliability Improvement

Companies adopted JIT

Some companies, benefited by adopting JIT

• Dell do not have to tie up capital in stock which means they can invest it in other areas of the business, such as R&D or promotion, to increase sales.

• Dell require less space for stock which means they save money on storage facilities which will increase their profit margins.

• Dell have a high dependence on their suppliers and should the suppliers fail them, it is Dell’s reputation and sales which would suffer if they were unable to meet demand from their customers.

• Dell may be unable to benefit from bulk-buy discounts which leaves them with an option of increasing the price to the customer or reducing their own profit margin.

Advantages of JIT

Capital not tied up in stocks

Less space required for stock

Closer relationships with suppliers

Reduced deterioration

Less vulnerability to fashion and technology changes

Reduction in stockholding costs

Increase in cash flow

Disadvantages of JIT

Danger of disrupted production due to non-arrival of supplies

Danger of lost sales High dependence on suppliers Less time for quality control on arrival of

materials Increased ordering and admin costs May lose bulk-buying discounts