Just in Time (JIT) – A Level Business CAIE Revision

Introduction to Just in Time (JIT)

Just in Time (JIT) production is a lean production technique of manufacturing that aims to minimise waste in the production process.
This is done by producing goods only as and when there is demand for them, hence the term ‘just in time’.
JIT is commonly used to manage stock control, reducing the cost and space for storing inventory.

JIT operates on ‘pull’ system of production control where production is dictated by consumer demand instead of predicted forecasts.
It aims to reduce waste and costs associated with production including storage costs of raw materials and finished goods.
The approach encourages flexibility in production allowing businesses to respond swiftly to changes in demand.

JIT requires strong communication with suppliers to ensure raw materials are delivered efficiently and on time.
The process requires a firm’s production system to be well-coordinated and highly efficient so as to meet the demand.
JIT heavily relies on technology for monitoring stock levels in real time and predicting when to order more.

JIT leads to cost saving through reduced storage space and lesser wastage of raw materials or finished products.
By producing only what is demanded, JIT can help increase efficiency and productivity within a firm.
It promotes improved supplier relationships as closely knit cooperation is required for effective JIT system.

Implementing JIT requires a significant investment in technology and training which can be costly.
The system is highly vulnerable to unexpected changes like a sudden surge in demand or supply chain disruptions as there are no stocks kept in reserve.
As JIT requires excellent coordination between various teams in the organisation, poor communication can severely impact its effectiveness.
Any slack or parameter changes in the production process can lead to wastage or delays, leading to customer dissatisfaction.