| JIT systems depend upon logistics including | | | | deadlines will make employees work hard to meet |
| transportation, warehousing and several strategies | | | | the company goals to see benefits in terms of job |
| for handling the potential supply chain uncertainties. It | | | | satisfaction, promotion or even higher pay. |
| is easy to grasp conceptually, everything happens | | | | Inventory Turnover |
| just-in-time. Just-in-time (JIT) inventory systems are | | | | The speed at which the turnover occurs involves the |
| not just a simple method that a company has to buy | | | | company's liquid resource: cash, there will be an |
| in to; it has a whole philosophy that the company | | | | increase in net profit. The shorter the time interval |
| must follow. The ideas in this philosophy come from | | | | between receipt of raw materials and incorporation |
| many different disciplines including; statistics, industrial | | | | of them in the manufacturing process, the greater |
| engineering, production management and behavioural | | | | the profitability. |
| science. | | | | The inventory philosophy is pivoted on designing an |
| Benefits of JIT | | | | inventory system that perfectly blends the |
| The main benefits of JIT are listed below. | | | | fundamentals of minimising cost and maximising profit. |
| ü Set up times are significantly reduced in the | | | | These fundamentals are men, material and machines |
| warehouse which will allow the company to improve | | | | often called the 3Ms of manufacturing or inventory |
| their bottom line to look more efficient and focus | | | | operations, if well balanced results in a workable JIT |
| time spend on other areas. | | | | philosophy. |
| ü The flows of goods from warehouse to | | | | -Increased quality, |
| shelves are improved. Having employees focused on | | | | -Decreased inventories |
| specific areas of the system will allow them to | | | | -Increase return on net assets |
| process goods faster instead of having them | | | | -Flexibility |
| vulnerable to fatigue from doing too many jobs at | | | | -Reduced investments, |
| once and simplifies the tasks at hand. | | | | -Reduced labour requirements, |
| ü Employees who possess multi-skills are utilised | | | | -Minimum cost, |
| more efficiently. This will allow companies to use | | | | -Smooth traffic flow, |
| workers in situations where they are needed when | | | | -Maximum utilization of resources, |
| there is a shortage of workers and a high demand | | | | The more relevant, useful intelligence that financial |
| for a particular product. | | | | managers have at their fingertips about their |
| ü Better consistency of scheduling and | | | | business, their customers, their suppliers or partners |
| consistency of employee work hours are possible. | | | | and their operations will motivate their organization to |
| This can save the company money by not having to | | | | make better decisions and increase their competitive |
| pay workers for a job not completed or could have | | | | advantage by applying the concepts of JIT to |
| them focus on other jobs around the warehouse | | | | inventory or manufacturing. JIT is a concept that can |
| that would not necessarily be done on a normal day. | | | | be applied to many aspects of a business other than |
| ü Increased emphasis on supplier relationships is | | | | inventory or manufacturing. |
| achieved. No company wants a break in their | | | | As an inventory tool, it can be overseen by financial |
| inventory system that would create a shortage of | | | | managers to monitor costs within the value chain. JIT |
| supplies while not having inventory sit on shelves. | | | | represents a new paradigm of business strategy |
| ü Supplies continue around the clock keeping | | | | shifting from traditional inventory management to |
| workers productive and businesses focused on | | | | web-based supply chain management that increases |
| turnover. Having management focused on meeting | | | | inventory turnover and reduces inventory holding. |