This is what many now call “Just in Case” manufacturing. This will typically result in long lead times through our processes, huge amounts of Work In Process (WIP) stocks and also large quantities of finished goods stocks that have not yet been ordered by our customers. We will also try to produce those products in large batches as the belief is that will make machines and processes more efficient, especially if those machines require a long time to setup. In traditional manufacturing we try to predict what the customer will want and we will create a forecast (or guess) against which we will produce our products. How does JIT differ from traditional manufacturing? With a JIT system each process pulls from the preceding process’ “supermarket” and that process will then work to replenish those shelves.
It took more than 15 years for Toyota to perfect their ideas and it was not introduced into western manufacturing until the end of the 1970’s.
Taiichi Ohno was tasked by Eiji Toyoda to make production more efficient through implementing these ideas and pull production with just in time concepts was developed. In this way shelves never became empty, nor did they end up overflowing with excessive inventory. Only what was removed from the shelves by the customers was actually replenished and ordered from suppliers. On a visit to the US the management team of Toyota were inspired by, of all things, how they saw a supermarket (Piggly Wiggly) handle their inventory. JIT is generally accepted as being a concept invented by Taiichi Ohno of Toyota after World War2 resources were very scarce in Japan so using them to create something that the customer did not actually want right now was not a good idea. Within a Just in Time manufacturing system, each process will only produce what the next process in sequence is calling for. This allows you to concentrate your resources on only fulfilling what you are going to be paid for rather than building for stock. So instead of building large stocks of what you think the customer might want you only make exactly what the customer actually asks for when they ask for it. Just in Time (JIT), as the name suggests, is a management philosophy that calls for the production of what the customer wants, when they want it, in the quantities requested, where they want it, without it being delayed in inventory.
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