Business, Legal & Accounting Glossary
A strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process.
Just-in-time is an inventory system where raw materials are delivered right before they are needed on the assembly line, and finished goods are manufactured just before they are shipped to customers.
Just-in-time improves return on investment by substantially reducing overhead cost, limiting quality inspections, and eliminating obsolete inventory. Just-in-time does generate substantial risk, however: under just-in-time systems, production stops when parts aren’t delivered on schedule, and huge bottlenecks are created when product isn’t shipped on schedule. Thus successful just-in-time manufacturing requires both superior management and a highly disciplined workforce. Just-in-time is closely associated with methods introduced and refined by the Toyota Motor Company of Japan and copied by manufacturers throughout the world. In truth, however, just-in-time is simply one element of the comprehensive Toyota Production System, which attempts to eradicate waste of all kind.
You need to make sure that you are able to get things just-in-time when you are filling an order for someone else.
In order to save on storage fees, my company orders supplies just-in-time from our distributors, so we can start processing them immediately.
The just-in-time inventory strategy of the warehouse in Mexico proved to be effective after it had been engaging in smooth operations for years.
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This glossary post was last updated: 5th November, 2021 | 0 Views.