just in time inventory lean manufacturing

Reducing the amount of inventory can reduce carrying costs. Warehousing excess inventory can be very expensive. This allows a company’s customers to be better served, while, at the same time, lowering the cost of doing business. The just-in-time inventory model lets manufacturers reduce their overhead expenses while always ensuring that parts are available to manufacture their products. The inventory storage location would then replenish just the amount of the material taken. In a manufacturing situation, a worker would go to an inventory storage location and remove the quantity of material needed for production. The store restocks the shelf with enough new product to fill up the shelf space. When shopping for groceries, a customer takes what s/he wants from the shelf and purchases them. Toyota’s founder used the American supermarket as his model for what he was trying to achieve in the factory. The concept behind Toyota’s system is to work intelligently and eliminate waste so that only minimal inventory is needed. Many manufacturers have tried to imitate Toyota without understanding the underlying concept or motivation, which might have led to the failure of those projects. Just-in-Time means that a manufacturer makes only what is needed, only when it is needed, and only in the amount that is needed. The original concept was created by the founder of Toyota. JIT avoids the waste associated with overproduction, waiting for material and holding excess inventory. Importantly, manufacturers must forecast their requirements accurately. Just-in-time (JIT) inventory is a stratagem that manufacturers utilize to increase efficiency and decrease waste by receiving goods only as they are needed in the manufacturing process, thereby reducing the cost of inventory.

Just in time inventory lean manufacturing