JIT System of Buying
Just-In-Time (JIT) purchasing is a system of buy
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Just-In-Time (JIT) purchasing is a system of buying which improves effectiveness and efficiency. As noted by D. Jerry Bowman in the journal Industrial Engineering, companies implementing JIT methods usually achieve "improved productivity and profitability." According to Ansari and Modarress, the definition for Just-In-Time purchasing is reflected in its name. Thus, in implementing the JIT concept, "materials are purchased or parts are produced in an exact quantity and just as they are needed." One of the major goals of JIT purchasing is to reduce the amount of inventory which is maintained at the manufacturing plant. At most, the JIT philosophy calls for only a few weeks' worth of production inventory. Ernest Raia, in the journal Purchasing, has claimed that the ultimate goal of JIT purchasing is to carry only a two-week supply; however, even this "seems like a veritable glut compared to the three hours of inventory maintained by Honda in Marysville, Ohio." Unfortunately, this type of emphasis on inventory reduction has confused many managers on the issue of what JIT purchasing is really all about. In this regard, Ansari and Modarress point out that JIT purchasing is intended not only to reduce inventory, but also to reduce "waste" throughout the production process. Ansari and Modarress define waste as "anything other than the minimum amounts of equipment, materials, workers, and time that are absolutely essential to production." The techniques used in JIT purch
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eme. Thus, "on time" in the traditional system could mean "anything arriving up to 12 days ahead of the nominal schedule, and as late as six days." By contrast, scheduling is more strict in the JIT system. In fact, suppliers are not only told what day to make deliveries, "they are also being given the precise time during the day in which to show up at the loading dock."
Success in JIT purchasing is strongly dependent upon the utilization of quality control techniques. As noted by Bowman, the philosophy of JIT purchasing requires a continuous striving toward "improvement in all areas." With traditional methods, problems in quality often take up a great deal of time. By contrast, the reduction of inventory in JIT programs makes quality control (QC) a necessity from the start. Sheridan explains this by noting: "Because 'buffer' stocks are all but eliminated, it is imperative that defects in purchased and manufactured components be kept to a minimum - to avert shutting down the production line." In addition to having less inventory on hand, having fewer (but more trustworthy) suppliers also requires the implementation of QC efforts. Ansari and Modarress further clarify the importance of linking JIT purchasing with an adequa
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Approximate Word count = 2339
Approximate Pages = 9 (250 words per page)
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