Just-In-Time Working

Is Just In Time Right for your Business?

Just In Time usually works best if your business produces a medium to high volume of a relatively high value product. (Its origins are in car manufacturing). Ideally your company should have short setup times on machines, and a commitment to quality assurance.

To see if Just In Time might be applicable to some or all of your business, work through the following steps.

Examine your business model

  • Are major customers driving an initiative towards more automated ordering and supply?
  • Could you extract more value from your suppliers by communicating directly with their systems?
  • Could you win more customers or foster increased customer loyalty by extending your business processes into supply partner organisations?

If you answered "Yes" to any of these questions, your business could benefit from employing JIT techniques in your ordering, planning and dispatch.

Identify key stages in the business

  • Can you identify the key interfaces between your business and your suppliers/customers?
  • Are ordering, delivery or transportation failures costing you time and money?
  • Can you quantify the cost of failure/delay at any given interface between you and your suppliers/customers?
  • Have you calculated the cost of managing your supply chain and could you reduce the cost by automating the processes?

If you answered "Yes" to any of these questions you are ready to look at the next section below on inventory. If you answered "No" to any of these questions you should review your processes further.

Minimise inventory

  • Do you know how much inventory you hold at any one time?
  • Do you know how much inventory you need to hold at any one time?
  • Would you benefit from implementing systems that communicate this information automatically to supply chain partners?

If you answered "Yes" to these questions, you are ready to look at the next section below on demand planning. Weigh up the benefits of minimising inventory against the costs of investing in JIT technology.

Analyse demand peaks

  • Does production proceed at a rate dictated by your customers rather than your supply chain partners?
  • Do you know in advance when demand peaks will occur?
  • Do your supply chain partners know in advance when your demand peaks will affect their business?
  • Can you quantify the cost of delays at peak periods?

If you answered "No" to any of these questions, you should consider using automated JIT techniques in ordering, supply and production to streamline your supply chain.

Review your working practices

  • Is the sequence of steps required to take a product from point of sale to point of delivery a standard one, repeatable at a pre-defined quality level?
  • Do your business partners’ systems give you automated access to component/material histories, quality procedures or safety certifications?
  • Can you trace what you produce (including its constituent parts) back to source and prove that you meet the appropriate commercial or regulatory standards?

If you answered "No" to any of these questions, consider how you could increase efficiency and improve customer satisfaction by automating the interfaces with your supply chain.

Just In Time (JIT) Business Advice: Crown Copyright © 2005-2014
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