Inventory Management through Just-in-Time


Ms. J. Ramya
Final MBA
SNR Institute of Management Sciences
SNR Sons College (Autonomous)
Coimbatore-641 006


Just-In-Time is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs. The process is often driven by a series of signals, which can be KANBAN, that tell production processes when to make the next part.


An inventory strategy companies employed to increase efficiency and decrease waste by receiving goods only as they are needed in production processes, thereby reducing inventory costs.

This method requires that producers are able to forecast the demand accurately.


The philosophy of JIT is simple-inventory is define to be waste. JIT is followed in order to manage the inventory system consequences.

In short, the Just-In-Time inventory system is all about having "the right material, at the right time, at the right place and in the exact amount", without the safety net of inventory.

JIT is implemented to remove inventory exposes pre-existing manufacturing issues. Under this way of working, businesses are encouraged to eliminate inventory that does not compensate for manufacturing issues, and then to constantly improve processes so that less inventor can be kept.


i. Setup times are significantly reduced in the factory. Cutting down the setup time to be more productive will allow the company to improve their bottom line to look more efficient and focus time spent on other areas that may need improvement. This allows the reduction or elimination of the inventory held to cover the "change over" time; the tool used here is SMED (Single Minute Exchange of Die).

ii. The flows of goods from warehouse to shelves are improved.

iii. Employees who possess multiple skills are utilized more efficiently.

iv. Better consistency of scheduling and consistency of employee work hours.

v. Increased emphasis on suppliers relationship.

vi. Supplies continue around the clock keeping workers productive and businesses focused on turnover.


The major problem with Just-In-Time operation is that it leaves the supplies and downstream consumers open to supply shocks & large supply or demand charges.


The following are some of the notable companies which is involved in the process of JIT:

* HP


Thus by applying this upcoming JIT technique the inventory costs are reduced. By analyzing the merits and demerits, the JIT is applied in many more sectors.

Ms. J. Ramya
Final MBA
SNR Institute of Management Sciences
SNR Sons College (Autonomous)
Coimbatore-641 006

Source: E-mail July 14, 2008




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