Advantages and Disadvantages of Just-In-Time (JIT) Manufacturing

In 30 Seconds

Just-in-time (JIT) manufacturing is a production approach that reduces waste by producing and replenishing materials only when they’re needed. When executed well, JIT can cut inventory carrying costs, free up floor space, and improve cash flow. The tradeoff is higher sensitivity to demand swings and supplier delays—because there’s less buffer stock. Many manufacturers use APS scheduling and better forecasting to make JIT more reliable at scale.

Most manufacturing facilities are looking to reduce production costs to maximize profits. Over time, many scheduling techniques have emerged to help these manufacturing facilities meet their production goals and increase efficiency. 

Just-In-Time manufacturing was designed to help manufacturers reduce inventory-related costs by receiving materials and producing goods only when they are needed. Just-In-Time scheduling is used to accommodate last-minute changes to orders and prevent damage or spoilage of inventory by preventing jobs from starting too early.

When the techniques are implemented, production facilities can align their raw material orders directly with their production schedules, so these items do not have to be stored for long periods. Just-In-Time production scheduling prevents jobs from being scheduled much earlier than needed, which requires WIP items to be held in inventory. JIT means that your production operations start with just enough time to be completed by the need date, so your goods are produced to ship, not to be stored. 

There are many benefits associated with Just-In-Time production, but the main goals of this method are to increase production efficiency while reducing waste, ultimately lowering production costs and increasing profits. On the flip side, implementing JIT methodology requires producers to accurately forecast demand to avoid material shortages.

Before implementing Just-In-Time strategies, it is essential to understand the advantages and disadvantages of the process.

Advantages of Just-In-Time (JIT) Manufacturing

The advantages of Just-In-Time (JIT) manufacturing include the following:

• Reduced Space Needed - With JIT, you have a faster turnaround of stock, which means that you do not need a lot of warehouse or storage space to store goods or materials. Ultimately, this will reduce the storage space your organization needs to rent or buy, freeing up funds for other parts of the business.
• Smaller Investments - JIT inventory management is an ideal methodology for small production facilities that do not have the funds needed in order to purchase huge amounts of stock at once. Ordering stock materials only when needed helps maintain a healthy, smooth cash flow.
• Waste Elimination/Reduction - A quicker turnaround of stock prevents goods that have become damaged or obsolete while sitting in storage, reducing waste. This again saves money by preventing unnecessary investment in stock and reducing the need to replace old stock.

While there are many advantages to the Just-In-Time manufacturing methodology, it also has drawbacks. Listed below are some of the disadvantages of Just-In-Time (JIT) manufacturing.

Disadvantages of Just-In-Time (JIT) Manufacturing

The disadvantages of Just-in-Time (JIT) Manufacturing include the following:

• Risk of Running Out of Stock - With JIT manufacturing, you carry less stock. This is because you base your stock on demand forecasts, and if those are incorrect, then you will not have the correct amount of stock readily available for your consumers. This is one of the most common issues with manufacturing that utilizes methodologies such as JIT and lean.
• Dependency on Suppliers - Having to rely on the timelessness of suppliers for each order puts you at risk of delaying your customers’ receipt of goods. If you are unable to meet consumer expectations, then they could take their business elsewhere. This is why it is important to choose reliable suppliers and build strong relationships with them, so you can ensure you have the materials you need to meet your customer demands.
• More Planning Required - JIT inventory management requires companies to understand sales trends and variances in close detail. Many companies have seasonal sales periods, meaning that some products will need higher stock levels to meet consumer demand. Therefore, you must plan for situations like this and ensure your suppliers can meet the requirements.

A software that can aid with Just-In-Time (JIT) manufacturing is PlanetTogether’s Advanced Planning and Scheduling software (APS). 

PlanetTogether’s APS software will automatically schedule your production operations so that they start with just enough time to be completed by their needed dates. For example, if an operation has a work content of one hour, the Just-In-Time start date will be set to one hour before the operation’s need date. 

Release rules can be applied to allow operations to schedule before their JIT start dates. Slack days provide some additional time between the end date of the operation and its need date to accommodate last-minute variations. The flexibility of PlanetTogether APS allows manufacturers to set different scheduling rules on different machines. 

APS software has become a must for operations seeking to take their production to the next level and can easily aid in increasing efficiency, improving inventory control, eliminating waste, and reducing costs. PlanetTogether’s APS software will take your production facility to the next level and turn your shop floor into a goldmine.

The shift to PlanetTogether is saving us about 15% in inventory overhead and about 20% in overtime labor expenses. We're not building equipment to stock any longer - we're building to ship.

DIRECTOR OF MANUFACTURING, MEDICAL DEVICES MANUFACTURING

 

JIT Readiness: A Quick Decision Framework

Use JIT when most of these are true:

• Demand is relatively stable (or you can segment stable SKUs for JIT).
• Suppliers are reliable and lead times are short/consistent.
• You have strong schedule discipline (finite capacity, realistic changeovers).
• You can detect disruptions early (inventory + WIP visibility).
• Changeovers are controlled and quality issues don’t create rework spikes.

Use hybrid JIT / just-in-case buffers when these are true:

• Demand volatility is high or forecast error is material.
• You rely on long lead-time or global suppliers.
• A single stockout can stop the line (single-sourced constraints).

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Software has become a must for modern-day manufacturing operations as customer demand for greater product assortment, faster delivery, and downward cost pressures grow. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

• Create optimized schedules that balance production efficiency and delivery performance

• Maximize throughput on bottleneck resources to increase revenue

• Synchronize supply with demand to reduce inventories

• Provide company-wide visibility to resource capacity

• Enable scenario data-driven decision making

Lean Manufacturing—Minimizing Waste with APS (Video)

JIT manufacturing is designed to reduce inventory-related costs by producing only when needed, but it also increases the pressure to forecast accurately and avoid material shortages. This video shows how APS supports lean execution by scheduling work to start “just in time,” while still giving planners the flexibility to handle last-minute changes without building excess inventory.

What you’ll learn in this video:

• How APS sets JIT start times so work begins with enough time to meet the need date (not to build-to-stock)
• How release rules and slack days help balance lean/JIT goals with real-world variability
• How lean teams reduce waste, WIP, and inventory, while improving schedule reliability