| Just in time is a method of production used within | | | | previous demand levels. Therefore, if there is a |
| the domain of Supply Chain Management. This | | | | sudden up-rise in demand stocks can end up being |
| manufacturing process is driven by a series of | | | | depleted as a consequence. This can have a very |
| indicators that are known as Kanban. These signals | | | | negative effect on customer service and lead to |
| inform manufacturers when it is necessary to make | | | | unhappy customers. It is vital that the Just in time |
| the next required part. Kanban commonly take the | | | | system is managed well in order for it to reap |
| form of 'tickets'. When the system is implemented to | | | | rewards. Another term related to this method of |
| its optimum, the Just in time method can improve | | | | manufacturing is 'Kaizan'. This means 'the continuous |
| the quality and efficiency of a manufacturer | | | | improvement of a process'. |
| dramatically. In addition, it can also increase the levels | | | | One of the first companies to implement the Just in |
| of return on investment. | | | | time strategy was the Ford Motor Company. They |
| When this method of Supply Chain Management is | | | | used a 'dock to factory floor' concept, whereby |
| employed, stocks are not replenished until current | | | | incoming materials went straight into the production |
| levels drop below a pre-determined level. This means | | | | area and were never stored idle on site. This meant |
| that warehousing remains uncluttered and any | | | | that there was a massive dependence on the |
| available space can be used to its best effect. The | | | | reliability of the freight or logistics company that |
| main drawback top this style of operating is that | | | | supplied the parts. |
| re-order levels are always determined by the | | | | |