1. Just in Time (JIT)
JIT is a manufacturing and inventory management philosophy focused on
producing or delivering goods and services precisely when they are
needed, minimizing waste and maximizing efficiency.
2. Principles of JIT
Minimization of Inventory
JIT aims to reduce
inventory levels to lower
storage costs and
eliminate excess.
Waste Reduction
JIT targets various forms
of waste, including
overproduction, waiting
times, and unnecessary
processing.
Continuous Improvement
JIT encourages
organizations to
constantly identify and
eliminate inefficiencies,
fostering a culture of
innovation.
3. Principles of JIT (Contd.)
Supplier Partnerships
JIT relies on close collaborations with
suppliers to ensure timely delivery of
materials.
Flexibility
JIT emphasizes flexibility to quickly
adapt to changing market demands
and optimize production schedules.
4. History of JIT
1
Origin
JIT originated in Japan in the 1950s
and 1960s, particularly in the
automotive industry. 2 Development
It was first implemented by Toyota
as part of the Toyota Production
System (TPS) to eliminate waste
and maximize efficiency.
3
Global Adoption
JIT gained widespread attention
outside Japan during the oil crisis of
the 1970s as companies sought to
reduce costs and increase
efficiency.
4 Evolution
Over the years, JIT has evolved to
incorporate advanced technologies
and sustainability principles.
5. Maruti Suzuki and JIT
1 Implementation
Maruti Suzuki works closely with
component suppliers to ensure timely
delivery of materials, minimizing
storage costs and enabling flexibility in
production.
2 Result
Maruti Suzuki's adoption of JIT has led
to efficient production processes,
optimized production schedules, and
minimal waste, contributing to its
success in the automobile industry.
6. Zara's Just-in-Time
Production Model
Zara, the renowned fashion retailer, has revolutionized the industry with
its innovative just-in-time (JIT) production model. This strategy allows
Zara to respond quickly to changing consumer trends and deliver new
products to stores in a matter of weeks.
7. Just-in-Time Production
1 Design
Zara's design team closely monitors fashion trends and quickly translates
them into new product designs.
2 Production
Zara's factories use JIT manufacturing to produce small batches of each
item, minimizing inventory and waste.
3 Distribution
Zara's logistics network delivers the new products to stores rapidly,
sometimes in as little as two weeks.
8. Implications of JIT for Zara
Operational Efficiency
Zara's JIT model allows it to
reduce inventory, minimize
waste, and respond quickly
to market demands.
Supply Chain Agility
Zara's streamlined supply
chain enables it to rapidly
replenish stores and
introduce new products
frequently.
Customer Satisfaction
Zara's ability to quickly
deliver the latest fashion
trends keeps customers
coming back for the newest
styles.
9. Competitive Advantages of JIT
1 Responsiveness
Zara's JIT model allows it to quickly
adapt to changing customer
preferences and market conditions.
2 Cost Efficiency
By minimizing inventory and waste,
Zara can offer competitive prices
without sacrificing quality.
3 Brand Perception
Zara's ability to deliver the latest
fashion trends reinforces its image as a
trendy, desirable brand.
4 Sustainable Operations
Zara's JIT approach reduces
environmental impact by minimizing
unused inventory and waste.
10. Lessons for Other Firms
Adaptability
Firms should be willing to continuously
adapt their operations to changing market
conditions and customer preferences.
Supply Chain Optimization
Streamlining the supply chain and
minimizing inventory can lead to
significant cost savings and operational
efficiencies.
Customer Focus
Staying closely connected to customers
and quickly delivering the products they
want is crucial for success.
Sustainability
Adopting sustainable practices, such as
reducing waste, can benefit both the
environment and the bottom line.
11. DELL: Case Study
Dell is a leading computer technology company that was started by
Michael Dell in 1984. Over the years, Dell has become one of the largest
PC vendors in the world, known for its innovative supply chain and
manufacturing processes.
by Zainab Naqvi
12. Traditional VS Dell's Supply Chain
Traditional Supply Chain
In the traditional supply chain model,
components are manufactured, then sent to
PC manufacturers, who then distribute the
finished products through resellers and
distributors before reaching the final
corporate customer.
Dell's Supply Chain
Dell's supply chain is more streamlined, with
the company directly sourcing components
from manufacturers and assembling the final
products to be delivered directly to the end
customer.
13. How Dell Revolutionized the Computer
Industry with JIT
1 Customization
Dell's JIT system allowed for high levels
of customization, where customers
could configure their computers online
and Dell would assemble them
accordingly, reducing the need for pre-
made inventory.
2 Reduced Costs
By minimizing inventory, Dell saved on
storage costs and avoided markdowns
on obsolete products, leading to
significant cost savings.
3 Faster Delivery
With components readily available and
assembly on-demand, Dell could deliver
products to customers faster than its
competitors.
4 Competitive Advantage
Dell's efficient supply chain and ability
to offer customized products at
competitive prices disrupted the
traditional computer industry, making it
a leader in the market.
14. Benefits of JIT in Dell
Minimized Inventory Holding Cost
Dell's JIT system helped minimize the
costs associated with holding excess
inventory.
Reduced the risk of excess inventory
By only producing what was needed, Dell
reduced the risk of having unsold or
obsolete products.
Cutting lead time
Dell's JIT approach allowed them to
deliver products to customers faster than
competitors.
Reduced the risk of obsolescence
Dell's JIT system helped them avoid the
risk of having inventory become obsolete
due to technological advancements.
15. Challenges in implementing JIT in Dell
Supplier Reliability
Ensuring a reliable supply of components from suppliers was crucial for Dell's JIT
model to function effectively.
Inventory Management
Carefully managing inventory levels and minimizing excess stock was a key challenge for Dell.
Production Flexibility
Dell needed to maintain a high degree of flexibility in its production processes to
accommodate customer customization.
Quality Control
Ensuring consistent product quality was essential for Dell's JIT model, as there was little room for error.
Investment in Technology and Training
Implementing the JIT system required significant investment in technology and
employee training to ensure smooth operations.
16. Supply Chain
Management:
Navigating the Present
Disruption and unpredictability have reshaped the supply chain
landscape. Just-in-time (JIT) models are being reevaluated and new
strategies are emerging to address raw material disruptions, rising costs,
and labor constraints.
17. Procurement Evolution
Diversifying Vendor Base
Managers are expanding
their roster of alternative
vendors to mitigate risk.
Supply chains are
becoming less reliant on
one or two vendors.
Human Capital Emphasis
Labor shortages have
emphasized the impact of
human capital on supply
chains.
Investing in people is
crucial for effective supply
chain management.
Technology Integration
Organizations are using
technology to reflect the
new realities of supply
chains.
An effective digital strategy
is critical for success.
18. Reshaping of Vendor Strategies
1 Onshoring Vendors
Organizations are bringing back overseas vendors due to increasing costs.
2 Vertical Integration
Many organizations are building in-house competencies.
Acquiring raw material providers is becoming more common.
3 Data & Analytics
Visibility into the supply chain with vendors and customers is extending.
Integration with customers and vendors is enhancing supply chain efficiency.
19. Global JIT Adoption
Toyota
Pioneered the JIT concept as part of
the Toyota Production System.
Harley-Davidson
Streamlined operations and improved
flexibility in manufacturing processes.
Apple
Employs JIT to manage the production of its devices.
20. JIT Success Stories
1 McDonald’s
Prepares food as orders are placed to
ensure freshness and reduce waste.
2 Zara
Quickly moves designs from concept to
store shelves to respond to fashion
trends.
3 IKEA
Adopts JIT principles to minimize
storage needs and efficiently manage
inventory.
4 Intel
Streamlines semiconductor
manufacturing processes and reduces
inventory levels.
21. Technology's Impact on JIT
Real-time Data
Sharing
Allows for the real-
time sharing of data
across the supply
chain.
Predictive Analytics
Enables predictive
analytics for
demand and
production.
Automation and
Robotics
Streamline
production
processes and
reduce lead times.
Inventory
Tracking
Systems
Digital tools enable
precise tracking of
inventory throughout
the supply chain.
Supply Chain
Visibility
Platforms
Offer end-to-end
visibility into the
supply chain.
Cloud Computing
Facilitates access to
data and software
applications from
anywhere with an
internet connection.
Communication Tools
Facilitate
collaboration
between different
departments and
suppliers.
Advanced
Technologies
Enable predictive
analytics and
streamline
production
22. The Future of Just-In-
Time (JIT)
Manufacturing
The future prospects of Just-In-Time (JIT) manufacturing and inventory
management remain promising. With advancements in technology such
as AI, IoT, and big data analytics, JIT systems can become even more
efficient and responsive. This evolution is set to revolutionize how
businesses manage their supply chains and production processes,
leading to improved operational efficiency and reduced costs.
23. The Evolution of JIT: Pre and Post COVID-19
PRE COVID
Companies embraced JIT principles to
minimize inventory holding costs. JIT was
widely adopted in sectors such as
automotive, electronics, and retail.
Companies relied on accurate demand
forecasting, close collaboration with
suppliers, and streamlined production
processes.
POST COVID
The pandemic exposed vulnerabilities in
global supply chains, leading to shortages of
critical components and risks of overreliance
on JIT practices. As a result, there has been
a reevaluation of supply chain strategies, with
a growing recognition of the need for buffer
stock, redundancy, and flexibility.
24. Future Prospects of JIT: Adapting to Change
1 Advanced Automation
Automation is set to revolutionize JIT manufacturing, enabling seamless
production processes with minimal human intervention, ultimately leading to
increased productivity and reduced operational costs.
2 Predictive Analytics
The incorporation of predictive analytics into JIT systems will enable businesses to
anticipate demand, optimize inventory levels, and minimize disruptions, leading to
enhanced operational efficiency.
3 Real-time Supply Chain Visibility
Real-time visibility across the supply chain will provide businesses with actionable
insights, enabling quick responses to demand fluctuations and potential
disruptions, ultimately leading to enhanced supply chain resilience.
4 Blockchain technology
5 Collaborative supply chain networks
25. Just-In-Time vs Just-In-Case Inventory
Management
JIT Emphasizes Efficiency
JIT focuses on minimizing inventory levels to optimize efficiency and reduce holding costs.
JIC Prioritizes Resilience
JIC, on the other hand, prioritizes resilience and risk mitigation by maintaining
buffer stock to guard against supply chain disruptions, ensuring continuity of
operations and customer satisfaction during uncertain times.
26. Conclusion: JIT in a Dynamic
Business Environment
Evolution of JIT Strategies
The application of Just-In-Time (JIT)
inventory management has evolved
over time, from its widespread adoption
pre-COVID-19 to a more nuanced
approach post-pandemic.
Hybrid Approach for the Future
The future application of JIT may
involve a hybrid approach that
combines JIT principles with elements
of Just-In-Case (JIC) inventory
management to strike the right balance
between efficiency and resilience.
