Just-In-Time [JIT] is an inventory management process that minimizes the standing inventory or production process to the bare minimum time to support production flow. It is also known as the lean inventory method. Under this process, there will be no stockouts but at the same time, it manages the business inventory turns at a satisfactory intensity. JIT’s chief advantages are as follows: JIT helps to minimize the stocks of raw materials with high-cost tags and with long lead times. JIT not only reduces inventory holding costs but also emphasizes the best product with high quality, on-time delivery, at a competitive price that enhances revenue for the shareholders. JIT aims at keeping inventory at a bare minimum to minimize the cost and to invest the money so saved in another process. Henry Ford may be called the father of JIT as observed in his autobiography that his company bought inventory that is needed immediately and that fitted into their production plans.
JIT deals with supply chain management. Supply chain management deals with the process of transforming the available raw materials into end products to be supplied to the consumers. JIT can say to be more successful in an organization if its logistic function performs well. Logistics can be termed as a secondary tool that helps to achieve time-oriented placing of resources. Toyota later introduced JIT as it found it very arduous to stock excessive inventories in limited land available for warehousing in Japan. JIT can be termed as a manufacturing process that eradicates waste connected with storage space, time and labor. JIT gives more significance to minimizing waste, waiting for time, overproduction, efficient transportation, processing, inventory, product effect and motion.
JIT can be efficiently managed with the employment of modern technology, flexibility and automation. JIT is proven to be successful due to the use of the latest technology and centers on the concept of “ the apt product at the correct time and at the correct place“. For example, International Truck & Engine Company, an engine supplier to Ford Motor Co, is employing electronic data interchange [EDI] for its vendor-collaboration system. The main aims of the JIT can be described as follows: a] To enhance the business capability to compete and to stay competitive forever. b] To enhance the efficiency in the manufacturing process. c] Minimizing the cost by minimizing the wastage of raw materials, time and effort. With help of JIT, International Truck is able to deliver the ordered quantity to a customer within 1 day.
The main disadvantage of JIT is that a manufacturer may have a constant worry that a supplier might underrate what is required to be manufactured and a shortage of a part may hamper a production line. JIT needs a complete sharing of business information with the suppliers and reluctance on the part of manufacturers to share information with vendors is acting as an impediment to the successful implementation of JIT. JIT is based on analyzing the inconsistency in demand and placing the order for the required demand. If an industry is having an extremely volatile demand model, ordering will be more arduous and may result in stock out of important inventories.
The use of JIT in Claire’s Antiques will usher large benefits as it could plan its sourcing of antiques from local artists and preplan in sourcing and disposing of antiques in relation to its customer’s demand. JIT will help Claire’s Antique to plan its storage space for storing antiques. JIT also helps them to manage their inventories stored in multiple locations around the world. The antique business is based on the economy of a nation. If there is a recession, then inventory may remain dormant for a long time adding more financial costs by way of interest on the sum invested. JIT may not be relevant in case there is a recession in an economy.
JIT may not be more significant for an antique firm as an antique business is based on the purchase of antique items when there is a public auction of antiques. Further, it is very difficult to estimate demand for antique products as demand is totally dependent upon the availability of the antique product and the economy of a nation. Hence, JIT may be irrelevant in a service industry like Claire’s antique. However, JIT can be more advantageous for Claire’s Antiques to store customer preferences, customer order details, suppliers’ names and availability of antique products, possible delivery times, etc. Claire’s Antique should invest in the computerized e-systems that offer the client to book their orders, avail speed delivery, and oversee the shipment as it transships through the supply chain system and for vendors or sellers to feed the information about the available antiques with them. This will help Claire’s antique to have a well efficient JIT system for their antique products.
Reference
Konicki Steve. “Just-In-Time Autos.” 2001. Information Week. Web.
Vokurka, Robert J., Rhonda R. Lummus, and Dennis Krumwiede. “Improving Manufacturing Flexibility: The Enduring Value of JIT and TQM.” SAM Advanced Management Journal 72.1 (2007): 14+.
Weintraub, Robert S., and Jennifer W. Martineau. “The Just-in-Time Imperative: The Imperative-And the Problems.” T&D 2002: 50+.