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Just-in-Time (JIT) advantages and disadvantages

Read all about the advantages and disadvantages of the Just-in-Time method

What are the advantages of Just-in-Time?

The Just-in-Time (JIT) concept is a manufacturing workflow method. It’s used to reduce flow times and costs within production systems and the distribution of materials. However, it’s not just limited to these benefits. Look below of all the benefits you’ll see in your organisation by adopting this method.

  • JIT eliminates waste in production, it means you can achieve better product quality
  • The JIT approach reduces the cost of inventories, whilst maximising the use of space
  • JIT stops over production. When over production occurs, it must be stored somewhere. The cost of a storage facility and transport is reduced when this method is used. Over production also implicates staff and time, so by using the JIT method, these issues can be avoided.
  • Low inventory levels release cash flow traditionally tied up in stock.
  • With products only manufactured to a customer’s requirements, it results in better customer satisfaction.
  • A skilled workforce will be required using the JIT method, as proper training is required to handle all the tasks.
  • JIT can be applied to a variety of business processes. This can include HR, accounting, supply chain, operations management, and relationship management. The model can help bridge the gap between different departments of your organisation.
 

What are the disadvantages of Just-in-Time?

The Just-in-Time method is not suitable for all organisations. Consider the challenges of the JIT method below to see if it’s right for your organisation.

  • The JIT system does not cope well with sudden changes in demand and supply. For instance, it’s not protected from external shocks caused by accidents, attacks, or other unexpected conditions.
  • Implementing the system can be challenging and time-consuming.
  • Unexpected effects can easily disrupt the JIT supply chains and expose any hidden costs.
  • With JIT, you only carry the stock that you need. This is based on demand forecasts, so if these are incorrect, stock won’t be available to meet the demands of your customer
  • You must rely on your suppliers for each order, so if you do not have a reliable and strong relationship with them, it could mean you cannot meet your customers’ demands
  • You must plan, especially if there are periods in the year where sales are higher. You must ensure that your suppliers can fulfil these
 

Is Just-in-Time (JIT) right for my business?

The Just-in-Time process is not a solution for all organisations. Determining if this is the best fit for your organisation is key. The Just-in-Time may be suitable for your organisation if:

  • You have a short turnaround on production
  • You have reliable suppliers
  • You have smooth supply chain management
  • You can implement accurate forecast
  • Your workforce can easily adapt and follow processes
 

What is operations management?

Operations management is a key area within any organisation. It plays a key role in keeping supply chains operational in today’s challenging environment. Discover the key to success when thinking about operations management. Find out more about Operations Management

Operations management key themes

Just in time Obsolesence Lean manufacturing Vendor managed inventory
Warehousing Warehousing management Inventory management

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