just-in-time system

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just-in-time (JIT) system or the Toyota production system (TPS)

a PRODUCTION MANAGEMENT system in which materials, components and products are produced for, or delivered to, the next stage of production (or customers) at the exact time they are needed. JIT seeks to minimize the amount of work-in-progress STOCKS held by a firm by synchronizing the flow of materials between production processes; and to economize on finished product stocks by matching the final assembly of products with the rate of customers' orders.

JIT is especially suited to high-volume production where uniform PRODUCTION-LINE OR ASSEMBLY-LINE schedules are operated on a continuous basis. Key elements in the successful application of JIT systems are:

  1. a high degree of cooperation and coordination with the (usually) single outside supplier of each particular material or component, who undertakes to supply on demand small consignments at frequent intervals and who carries sufficient stocks to permit immediate delivery;
  2. an internal control procedure which assists the smooth movement of materials and components from process to process at the required time. An illustration of this is provided by the Japanese car company Toyota's KANBAN (card) system which uses cards attached to component containers to monitor the flow of production through its factories.

The advantages of JIT include the reduction of stockholding costs; reduced space requirements; and faster manufacturing rates. On the other hand, JIT systems leave the firm more vulnerable to production losses occasioned by delivery hold ups or component defects. See PRODUCTION SCHEDULING, MATERIALS REQUIREMENTS PLANNING, MATERIALS PLANNING, LEAN MANUFACTURING, ANDON, OPTIMIZED PRODUCTION TECHNOLOGY. See also KAIZAN, JIDOKA, SUPPLIER DEVELOPMENT.

just-in-time (JIT) system

a system in which products are delivered to customers, and materials and components are purchased for the next stage of production, at the exact time they are needed. JIT seeks to economize on finished product stocks by matching the final production of goods with the rate of customers’ orders, and to economize on work-in-progress stocks by synchronizing the flow of materials between production processes. Operation of JIT systems requires a higher degree of cooperation between suppliers and customers, providing most of the advantages of VERTICAL INTEGRATION while permitting firms to remain independent and to trade through MARKETS.
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