A couple decades ago, Lean Manufacturing introduced “just in time production” which rapidly became all the rage.
Gemini recounts:
AI Overview
Just-in-time (JIT) production is a lean manufacturing philosophy where materials and goods are produced or received only when they are needed, minimizing waste and storage costs. It aims to align inventory and raw material availability with actual product demand, ensuring the right materials are available at the right time.
Key Principles of JIT Production:
Reduced Inventory:
JIT minimizes inventory holding costs and storage requirements by receiving materials and producing goods only as needed.
Elimination of Waste:
By producing only what is needed, JIT reduces waste from overproduction, damaged goods, and obsolete inventory.
Improved Productivity:
JIT can lead to faster product turnaround, shorter production cycles, and reduced lead times.
Enhanced Efficiency:
JIT allows for better matching of supply and demand, resulting in smoother production flow and reduced delays.
Strong Supplier Relationships:
JIT relies on reliable suppliers to deliver materials on time and in the correct quantities.
Benefits of JIT Production:
Reduced Storage Costs:
Less inventory means less storage space is needed, freeing up resources and reducing storage-related costs.
Lower Inventory Holding Costs:
Holding inventory incurs costs such as storage, insurance, and potential obsolescence. JIT minimizes these costs.
Improved Cash Flow:
JIT reduces the need to invest in large amounts of inventory, freeing up cash for other business needs.
Faster Product Turnaround:
JIT can lead to quicker product development and delivery times.
Enhanced Customer Satisfaction:
JIT can lead to shorter lead times and better responsiveness to customer demands.
Challenges of JIT Production:
Dependence on Suppliers:
JIT relies heavily on reliable suppliers, and disruptions in the supply chain can halt production.
Risk of Stockouts:
If demand unexpectedly increases or a supplier is delayed, JIT can lead to stockouts.
Requires Strong Coordination:
JIT requires effective coordination between all departments and suppliers to ensure materials are available when needed.
Potential for Increased Costs:
JIT can require more frequent and smaller orders, potentially increasing transportation costs.
In essence, JIT production is a strategy that aims to align production with actual demand, minimizing waste and costs while enhancing efficiency and customer satisfaction. However, it requires careful planning, strong supplier relationships, and a robust process to mitigate potential risks associated with supply chain disruptions.
So… The conclusion is “NO! THOSE PROBLEMS ARE ABSOLUTELY NOT FORESEEABLE”. …Sarc…
Might our current supply chain Volatility be traced to the JCs’ (and shareholders) insistence on grabbing the lower cost benefits of “Lean Manufacturing”?
ralph
Grabbing the short term loot is way better than long term planning.
