JIT was pioneered by Toyota, the Japanese car manufacturer in the 1970s, with a view to

reducing the delay in meeting the demands of the customers. JIT is a made-to-order or pull-
based method, wherein, the inventory is supplied only as required. The invent ory is supplied
based on the demand made. This result in savings in inventory costs on account of the fact
that only the minimum inventory is held in the supply chain.
For the successful implementation of the JIT system, the following have to be ensured:
High level of co-ordination between the sales and the production team.
A well-planned production system with accurate assessment of requirements.
No delays or glitches in production schedules.
Effective communication between the clients and the servers.
Effective control over the quality at every stage of production.
Proximity between the supplier and receiver of inventory.
Timely and reliable delivery of raw materials.
Availability of adequate human resources.
Some of the key features of the JIT system are listed below:
There exist few reliable vendors who can deliver high quality inventory within very
short timeframes.
Inventory is supplied in the nick of time in small lots which drastically reduces the
carrying costs.
Long term purchase contracts are entered into with suppliers at economical prices
which curtail the paperwork and negotiation time associated with arriving at the
supply price.
The inspection of inventory takes place as and when received, paving the way for a
lean inventory management department.
Transportation costs with regard to the movement of inventory from the storage
locations to the production sites can be avoided.
Goods are produced as per the requirement of the end-user and hence over-production
and the resultant excess holding of inventory can be avoided.
Payments are made for batches of goods supplied as per contract terms, rather than
for small lots, which leads to effective working capital management.
The production cycle becomes shorter, as the waiting time and interruptions due to
delays are avoided.
Wastage due to production of defective products is eliminated as the output at every
stage of production is inspected, before passing on to the next stage.

The important advantages of implementing the JIT system are improved productivity,
efficiency, cash conversion cycle and profitability, by way of a shorter production cycle,
elimination of wastages, and decrease in finance costs, inventory costs and labour costs.
Kanban, also spelt kamban, is a Japanese term for signboard or Billboard that indicates
available capacity (to work). Kanban is a concept related to lean and just -in-time (JIT)
production, where it is used as a scheduling system that tells you what to produce, when to
produce it, and how much to produce.

A Kanban is a card containing all the information required to be done on a product at each
stage along its path to completion and which parts are needed at subsequent processes. These
cards are used to control work-in-progress (W.I.P.), production, and inventory flow.

A Kanban System allows a company to use just in time (J.I.T) production and ordering
systems which allow them to minimize their inventories while still satisfying customer
demands.

A Kanban System consists of a set of these cards, with one being allocated for each part
being manufactured, that travel between preceding and subsequent processes. The Kanban
System was developed more than 20 years ago, by Mr. Taiichi Ohno, a vice president of
Toyota, along with Shigeo Shingo, to achieve objectives that include:

Reducing costs by eliminating waste/scrap

Try to create work sites that can respond to changes quickly
Facilitate the methods of achieving and assuring quality control
Design work sites according to human dignity, mutual trust and support, and
allowing workers to reach their maximum potential.
A Kanban System has the following characteristics:
A simple and understandable process
Provides quick and precise information
Low costs associated with the transfer of information
Provides quick response to changes
Limit of over-capacity in processes
Avoids overproduction
Minimizes waste
Control can be maintained
Delegates responsibility to line workers

Benefits

A Kanban system allows a company to reduce inventory levels, which reduces the cost
associated with stocking and storing materials in the organization. Companies that use a
Kanban system in a lean environment allow actual customer demand to determine the need for
materials and not forecasts of the demand.