Just-in-time (JIT) production, also called the Toyota Production System, is a production strategy for reducing in-process inventory and production costs. In the JIT system a signal (also called a kanban) is generated between different points in the production process. The signal, designed to be visually observed easily by supervisory staff, tells the production staff when to request the next part so that materials can be delivered to the production line at just the right time without delay or too early. The signal may indicate the presence or absence of a part on a shelf. JIT also gives an indication of stock depletion so that replenishment orders for new stock can be placed at the right time. When products are completed on time, they are delivered to customers as soon as possible. This method ensures the calculation of the most exact quantity of parts in the assembly line and thus minimizes the storage of excess parts during the production process. This reduces the storage space and costs of the parts. The finished goods are moved out to customers to reduce the need for large storage spaces. An excess supply of parts may need to be returned to storage afterwards. Therefore, JIT helps improve efficiency, cost-effectiveness, production time and productivity.
However, in the production line there should be a sequence of workstations operating together to produce products. This means that failure or interruption to any workstation will affect the operation of the whole production line.
Advantages of JIT production are as follows:
- It helps calculate the exact quantity of parts in a production line; hence reducing excess storage of parts/materials (or zero inventory) on the production line.
- It gives signals for the next part/material to be delivered to the production line to avoid interruption of production.
- It provides signals for parts/materials delivery to the production line at the right time without delay or early delivery.
- It gives a notice on stock depletion and alerts re-ordering of parts/materials.
- It improves production efficiency, costs-effectiveness, production time, and productivity.
- It helps to manufacture high quality products at low cost.