Lecture Notes: Just-In-Time Production System by Alex Berman

Introduction

• Focus on Just-In-Time (JIT) production system.
• Developed post-WWII by Toyota in Japan.
• Application across various business areas.

Context and Development

• Post-War Japan Challenges
  • Limited cash and resources.
  • Scarcity of land for factory expansion.
• Taichi Ono's Innovations
  • Gradual development in the 1950s and 60s.
  • Widespread adoption in the 1970s.

What is Just-In-Time?

• Philosophy
  • Production system operates with minimal resources.
  • Minimize wait times between production stages.
• Key Benefits
  • Significant savings on inventory costs.
  • Reduces need for warehousing (space, power, staff, security).

Core Concept

• Efficiency and Value
  • Evaluate if each production step adds value.
  • Strive for efficiency with minimal error margin.
• Risks
  • Relies on perfect supply chain timing.
  • Potential for system shutdown if supply issues arise.

Advantages in Japan's Context

• Small Geographical Size
  • Reliable, timely delivery from suppliers.

Quality and Efficiency

• Interlinking
  • Quality is required to achieve efficiency.
• Wider Applicability
  • Can be applied to other business areas beyond manufacturing.

Comparison: Just-In-Time vs. Just-In-Case

• Just-In-Case
  • Minimizes risk by maintaining buffers (extra stock, overstaffing, etc.).
  • Invests in potential mistakes.
• Just-In-Time
  • Avoids excess by improving quality and control.
  • Ensures departmental visibility to manage workloads efficiently.

Impact on Business Practices

• Quality Control
  • Trust in stock quality lessens need for backups.
• Departmental Coordination
  • Better visibility between sales and production.
• Service Optimization
  • Cut or merge low-demand services to economize resources.

Human Element

• Employee Morale
  • Encourages consistent performance through trust.

Conclusion

• Highlights the benefits of adopting JIT principles.
• Encourages learning more about business theories and history.