Review of Just-In-Time Inventory Management: Implementation of a Successful Program

Just-in-time inventory management: implementation of a successful program.

By Epps, Ruth W.

Just-in-time method is a thought that is able to cut all unnecessary spends, which comes from non-value added activities like delayed, moved or inspected time. There are three stages of what Just-in-Time method is and how this is working:

1. Kanban: In this stage, JIT is just a tool used to manage inventory for a shop of factory. It could improve revenue for managers who used could properly manage inventories to minimize wastes.
2. Production planning: At this stage, managers want to control as few inventory as possible. It’s driven by having continuous delivery of items instead of forecasting demands. The lead time in this stage is much shorter. And it’s important to keep good relationship with vendors to have a continuous supply
3. Global management philosophy: JIT method is used in the whole management decision, including factory panning, technology and resource sharing.

To successfully implement, there are several points to notice:

• Include vendors in the planning to guarantee the supply. Narrowing the supplier number and keep a long-term contract.
• All employees need to understand the situation and procedures at a daily basis.
• Include freight carrier in the process to lower cost
• Make sure upstream and downstream cooperating well
• Make sure both process and product quality still in the same level.

There are several requirements that can be seen as indicates of successful JIT implement:

• Keeping a continuous production process with a level and constant output throughout a production period
• reducing work-in process down to a minimum number of units
• improving assembly area layout as a result of new production process
• establishing a good relationship with suppliers

In JIT environment, the inventory management is a key measurement of JIT process. Managers try to keep zero inventories while still satisfying the requirements from customers. To implementing JIT, each item should be given a unique code and recorded by backflushing. When raw materials are arrived and delivered to production process, they are not recorded until final products are finished.