The Advantages of Jit

Just In Time (JIT) in generally is defined: ‘Produce and deliver finished goods just in time to be sold, subassemblies just in time to be assembles into finished goods, fabricated parts just in time to go into subassemblies, and purchased materials just in time to be transformed into fabricated parts' (Schonberger, 1982, p.17). Narrowing the fields into manufacturing, the implications of JIT have been comprehended more simplify but profoundly, which just means supplying the right items in the appropriate quantity at the accurate time (Cowton and Vail, 1996). The central emphasis of JIT system is decreasing all forms of waste, which can significantly improve the traditional manufacturing system. One of the main apparent advantages of the JIT system is controlling the operation cost effectively, which can directly influence the process of location decision in a company.

In contemporary society, the overriding ability of reducing cycle time and economizing operational costs is important for generating growth in ruthless manufacturing competition. The JIT system is utilized to organize the areas such as purchasing, supply, sales and marketing by the managers of the companies who are impelled to seek out a methodical system to give them the edge over their competitors.

Although JIT and traditional purchasing have the same activities, there are noticeable differences in processes. JIT purchasing emphasizes the purchase of minimum lot size with a small number of nearby suppliers rather than the traditional practice of large lot sizes and infrequent deliveries. According to the frequent demands of the materials, long-term contracts are built between JIT purchasing companies and suppliers. The buyers can often get the suggestions on technical matters from suppliers to design better parts, get more profits, and improve productivity. In JIT purchasing, suppliers have responsible to delivering the right quantity of items, which means there is no rejection from the suppliers. In contrast, traditional purchasing averages accept a 2 percent of reject rate (Ansari and Modarress, 1990). One of the most significant features about JIT purchasing is there is a special transport system well matched with JIT delivery schedules designed by the buyers to make sure of the on-time delivery. Ansari and Modarress (1990) believe that the major benefits about the JIT purchasing originate from two main reasons. Firstly, the long-term relationship is established between the buyer and supplies. There is no need for rebidding every year and the cooperative environment contribute JIT purchasing company to share their product designing, manufacturing information and business strategies with the supplies. Therefore, they will have similar production goals which contain the high quality, productivity, profitability and growth. The next step in achieving the JIT objective is small lot size with frequent deliveries, which required more flexible and changeable systems