Just in time (JIT) is a production strategy that strives to improve a business' return on

investment by reducing in-process inventory and associated carrying costs. Just in time is a type
of operations management approach which originated in Japan in the 1950s.
It was adopted by Toyota and other Japanese manufacturing firms, with excellent results:
Toyota and other companies that adopted the approach ended up raising productivity (through
the elimination of waste) significantly.[1] To meet JIT objectives, the process relies on signals
or Kanban (?, Kanban) between different points, which are involved in the process, which
tell production when to make the next part.
By using just-in-time concepts, there is a greatly reduced need for raw materials and work-inprocess, while finished goods inventories should be close to non-existent. The use of just-intime inventory has the following advantages:
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There should be minimal amounts of inventory obsolescence, since the high rate of
inventory turnover keeps any items from remaining in stock and becoming obsolete.
Since production runs are very short, it is easier to halt production of one product type
and switch to a different product to meet changes in customer demand.
The very low inventory levels mean that inventory holding costs (such as warehouse
space) are minimized.
The company is investing far less cash in its inventory, since less inventory is needed.
Less inventory can be damaged within the company, since it is not held long enough for
storage-related accidents to arise. Also, having less inventory gives materials handlers
more room to maneuver, so they are less likely to run into any inventory and cause
damage.
Production mistakes can be spotted more quickly and corrected, which results in fewer
products being produced that contain defects.

Despite the magnitude of the preceding advantages, there are also some disadvantages
associated with just-in-time inventory, which are:
A supplier that does not deliver goods to the company exactly on time and in the correct
amounts could seriously impact the production process.
2. A natural disaster could interfere with the flow of goods to the company from suppliers,
which could halt production almost at once.
3. An investment should be made in information technology to link the computer systems
of the company and its suppliers, so that they can coordinate the delivery of parts and
materials.
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A company may not be able to immediately meet the requirements of a massive and
unexpected order, since it has few or no stocks of finished goods.

Benefits
Main benefits of JIT include:

Reduced setup time. Cutting setup time allows the company to reduce or eliminate
inventory for "changeover" time. The tool used here is SMED (single-minute exchange of
dies).
The flow of goods from warehouse to shelves improves. Small or individual piece lot sizes
reduce lot delay inventories, which simplifies inventory flow and its management.
Employees with multiple skills are used more efficiently. Having employees trained to work
on different parts of the process allows companies to move workers where they are
needed.
Production scheduling and work hour consistency synchronized with demand. If there is no
demand for a product at the time, it is not made. This saves the company money, either by
not having to pay workers overtime or by having them focus on other work or participate in
training.
Increased emphasis on supplier relationships. A company without inventory does not want
a supply system problem that creates a part shortage. This makes supplier relationships
extremely important.
Supplies come in at regular intervals throughout the production day. Supply is synchronized
with production demand and the optimal amount of inventory is on hand at any time.
When parts move directly from the truck to the point of assembly, the need for storage
facilities is reduced.
Minimizes storage space needed.
Smaller chance of inventory breaking/expiring.
Waste Elimination Supports Continuous Quality and Productivity Improvement [6]

Problems[edit]
Within a JIT system

Just-in-time operation leaves suppliers and downstream consumers open to supply shocks and
large supply or demand changes. For internal reasons, Ohno saw this as a feature rather than a
bug. He used an analogy of lowering the water level in a river to expose the rocks to explain
how removing inventory showed where production flow was interrupted. Once barriers were
exposed, they could be removed. Since one of the main barriers was rework, lowering
inventory forced each shop to improve its own quality or cause a holdup downstream. A key
tool to manage this weakness is production levelling to remove these variations. Just-in-time is
a means to improving performance of the system, not an end.
Very low stock levels means shipments of the same part can come in several times per day. This
means Toyota is especially susceptible to flow interruption. For that reason, Toyota uses two
suppliers for most assemblies. As noted in Liker (2003), there was an exception to this rule that
put the entire company at risk because of the 1997 Aisin fire. However, since Toyota also makes
a point of maintaining high quality relations with its entire supplier network, several other
suppliers immediately took up production of the Aisin-built parts by using existing capability
and documentation.