Conventional and JIT approaches

Stock exists because items have been bought before they are required. It is normally uncertainty or overcaution that causes inventory. The principle of JIT is simply that we have items when they are needed and none when they are not needed.

JIT supply is a result of high-quality supply.

The idea may be simple but the application of JIT has given the opportunity to decimate stockholding without affecting customers. Instead of trading availability and stockholding as discussed in Chapter 2, the trade-off is between organization and stockholding. The better organized and controlled the supply chain, the less inventory is required.

Companies which are considering how JIT can work in their business, or avoiding it in a Canute-like manner, should realize that JIT is an outcome of other techniques, not a technique of its own. It is the logical aim of tight inventory control, effective process planning and plant design, workforce motivation, cost reduction, logistics and even material requirements planning (MRP). The optimization of these together inevitably leads to the JIT approach. The elements of JIT are the techniques to be developed, for example:

• supply what is required

• supply the quality required

• reduce lead times

• organize effectiveness

• use all the expertise available (i.e. people who do the jobs plus technical backup).

These are the fundamental changes which lead to JIT - all good inventory management...