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

2/12/21 12:00 AM

Most manufacturing facilities are looking to lower the costs associated with their production in order to maximize their profits. Over time, many scheduling techniques have emerged as a way to help these manufacturing facilities meet their production goals and increase their 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.

ADVANTAGES AND DISADVANTAGES OF JUST-IN-TIME (JIT) MANUFACTURING

When the techniques are implemented, production facilities are able to align their raw material orders directly to their production schedules so that these items do not have to be stored for long periods of time. Just-In-Time production scheduling prevents jobs from being scheduled much before they are 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 that your goods are being produced to ship, not to be stored. 

There are many benefits associated with Just-In-Time production, but the main goals of this method is to increase the efficiency of production while decreasing waste to ultimately lower the production costs and increase profits. On the flip side, implementing JIT methodology requires producers to be able to accurately forecast their demand to avoid running into 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 amount of storage space your organization will need to rent or buy, which will free 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 they are needed enables you to maintain a healthy and 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 through preventing investment in any unnecessary stock and reducing the need to replace old stock.

While there are many advantages to the Just-In-Time manufacturing methodology, there are also some drawbacks to it as well. 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 do not carry as much stock. This is because you base your stock off of 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 utilize 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 have a strong relationship with them so that you can make sure that 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 a number of products will need a higher stock level to combat consumer demand. Therefore, you must plan ahead for instances like this and ensure that your suppliers are able to fulfill 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 that are seeking to take their production to the next level and can easily aid with efficiency increase, inventory control, waste elimination, and cost reduction. 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.

BRUCE HAYS, DIRECTOR OF MANUFACTURING, J&J SYNTHES

 

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. 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 an 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

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!

Related Lean Video

 APS Resources

Topics: just in time

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