In the early 1970s there
was a motor vehicle company in Japan that some people may be familiar with – Toyota.  Toyota was not unlike many other manufacturing
businesses in Japan in the post-World War II era.  Still recovering from the war, Japan was financially
insecure.  Without significant amounts of
capital on hand, it was difficult for this nation’s businesses to finance some
of the more common methods of large batch inventory production enjoyed by
businesses elsewhere (Plenert, 2007).  As an island nation, Japan did not really
have the space required to build large numbers of massive factories to support
the batch production they desired.  To
further complicate their situation, the country was also lacking in natural and
personnel resources.  This brings our
examination of Toyota to a man known as Taiichi Ohno.

            Taiichi Ohno was born in China, but moved to Japan as a
child.  After a short time working with
the Toyoda company through the Great Depression, Ohno joined the Toyota company
at age 31.  While he started only as a
supervisor in an engine manufacturing shop, he was eventually able to work his
way up the corporate ladder and find his place within the company as an
executive (Ohno, 1988).  As an executive and industrial engineer, Ohno
had many responsibilities, one of which was consulting with suppliers.  Seeing issues with the Toyota production
system, it was in this executive role that Ohno would eventually be credited
with developing what is today known by many different names: Just-In-Time

            Just-In-Time Production (JIT) has gone by many names
since its inception: the Toyota Production System (TPS), Short-Cycle
Manufacturing (SCM), Continuous-Flow Manufacturing (CFM), Demand-Flow
Manufacturing (DFM), and, most recently, Lean Manufacturing (Wikipedia,
2017).  JIT Production, at its core, is a production
method that focuses on reducing and eliminating waste in the production
process.  At its inception, it
effectively meant that goods were produced precisely when the ‘customer’
required them.  The ‘customer’ in this
instance could be either an end user or another manufacturer.  As time moved forward, JIT would eventually
develop more fully to encompass the philosophies of: continuous improvement, waste
elimination, good housekeeping, set-up time reduction, leveled/mixed
production, and autonomation (Institute for Manufacturing,

            The two primary principles of eliminating waste and
continuous improvement are key to the JIT process.  Waste in production comes in many forms. JIT
Production specifically defines seven forms of production waste:
overproduction, time, transportation, processing, inventory, motion, and
production defects (Institute for Manufacturing,
2016).  JIT Production seeks to identify and
eliminate all seven types of waste to maximize profitability within the
production process.  Beyond just
attempting to eliminate waste, JIT Production strives for continuous
improvement in its processes.  Focusing on
issues such as preventative maintenance, fundamental problems, and complexity
of system design, processes and systems will be constantly analyzed to find
ways to identify deficits and implement optimizations (Institute for
Manufacturing, 2016).

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            JIT Production was revolutionary for its time because the
philosophy was in stark contrast to the more common idea of Just-In-Case
Production (JIC).  JIC Production focused
on the principles of keeping vast amounts of inventory on hand in large
factories should a higher demand for the product occur (Investopedia,
2017).  This led to much higher inventory and
production costs for the businesses that were using this strategy.  By contrast, JIT Production focuses on having
multiple smaller factories that only have materials in the factory that are
currently in use.  This leads to a
significant reduction in the turnaround time on finished products.

            Since its inception in the 1970s, JIT Production has
become both a process and a philosophy.  As
a process, JIT Production focuses on ensuring that factories only have products
and materials that are actively being utilized and are then quickly moved to
the next ‘customer.’  As a philosophy, it
focuses on cost saving measures such as eliminating waste and continuous
improvement of processes and systems. 
With proper implementation, JIT Production planning can lead to
significant inventory cost reductions for a company and much shorter processing
times for materials.

of JIT Production

            To change an existing system to a new one, the benefits
of taking on the new system must outweigh the costs of having to remove the old
one.  Not only must the benefits be
significant, but they must also be actual solutions to problems that a company
has.  It is because of the advantages of
shorter production runs, reduced warehouse storage costs, and less capital
invested in raw materials that many companies have elected to adopt the JIT
Production process.  More than just the
immediate cost saving benefits, the cost saving philosophies of reducing waste
and continuous improvement can be a significant boon to a struggling business.

            The phrase ‘time is money’ has been around for a very
long time.  To a business, there can be
no more significant cost than time as it is the one resource that is truly
limited.  Because time is limited and
valuable, being able to do more in either the same or less time can prove
valuable to a company.  JIT Production
has a time asset component to it.  A
production run is defined as a group of similar or related goods that are
produced by using a particular group of manufacturing procedures, processes, or
conditions (WebFinance Inc, 2017).  The length of a production run can directly
correlate to its cost.  Longer runs
require more materials and more space to store the finished product.  Because, with JIT Production, only the
required amounts of product are being developed, production runs are significantly
shorter.  Time, and therefore money, is
saved by reducing holding times and allowing for faster movement from producing
one product to the next.


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