Just-In-Time (JIT)
A production strategy where materials arrive exactly when needed, reducing inventory holding costs.
Just-In-Time (JIT) is a production methodology where materials and components are produced or delivered exactly when needed in the manufacturing process—not before, not after. Instead of maintaining large inventories "just in case," JIT operates on the principle of "just in time," minimizing inventory carrying costs and reducing waste. Developed by Toyota, JIT is a cornerstone of lean manufacturing.
Core Concept
Traditional manufacturing: Buy materials in bulk → Store in warehouse → Pull to production floor → Make products → Store finished goods → Ship when customer orders
JIT manufacturing: Receive materials → Immediately into production → Completed products → Immediately shipped (minimal storage at any stage)
Key Principles of JIT
1. Pull System (vs Push System)
Push: Production schedule says "Make 1000 units" even if no customer orders. Hope to sell them later. (Leads to excess inventory)
Pull: Customer order triggers production. Make only what's ordered, when it's ordered.
2. Zero Inventory Ideal
While true zero inventory is rarely achievable, JIT aims to minimize inventory at all stages—raw materials, WIP, and finished goods.
3. Right Quantity, Right Time, Right Place
Deliver exact quantity needed to exact workstation exactly when needed—not an hour early (causes congestion) or hour late (stops production).
4. Continuous Flow
Materials flow smoothly through production without stopping, waiting, or accumulating. Like a river flowing continuously vs water collecting in ponds.
Prerequisites for JIT Success
JIT is not just "order less inventory." It requires fundamental operational excellence:
- Reliable Suppliers: Suppliers must deliver on time, every time, with zero defects. Can't afford material shortages or quality issues
- Stable Production: Machines must be reliable (no unexpected breakdowns). Implement TPM (Total Productive Maintenance)
- Quality at Source: Every operation produces perfect quality. Can't afford defects discovered later requiring rework/scrapping
- Short Setup Times: Quick changeovers allow making small batches economically. Implement SMED (Single Minute Exchange of Dies)
- Flexible Workforce: Workers trained on multiple operations to handle varying workload
- Demand Stability: Relatively predictable demand pattern. Wild fluctuations make JIT difficult
Real Implementation Example
Company: Bengaluru electronics assembly, 35 employees, makes LED driver PCBs
Before JIT (Traditional Approach):
- Purchased components once per month in bulk (estimated requirement)
- Component inventory value: ₹25 lakhs
- Warehouse space: 1500 sq ft
- Problems:
- Items nearing expiry (date-sensitive components like electrolytic capacitors)
- Some components became obsolete when customer changed design specs
- Cash tied up in inventory (₹25L not available for other business needs)
- Storage costs: ₹50,000/month rent + ₹30,000/month stores staff salary
JIT Implementation (12-month transformation):
- Supplier Development:
- Identified 2 reliable local electronics distributors within 15 km
- Negotiated weekly deliveries instead of monthly
- Shared 4-week rolling production forecast so suppliers can plan
- Set quality standards—suppliers must deliver defect-free components or face penalties
- Production Smoothing (Heijunka):
- Instead of large batches (500 PCBs of Model A, then 300 of Model B), switched to smaller mixed batches (50A + 30B daily)
- Reduced setup time through standardized fixtures and quick-change stencils (setup from 2 hours to 20 minutes)
- Kanban System:
- Two-bin system for components. When first bin empty, card sent to purchasing. Second bin lasts until replenishment arrives
- Visual signal system—red card = order component now
- Quality at Source:
- Incoming components inspected immediately upon receipt (sample checking)
- First PCB of each batch tested extensively before full production run
- AOI (Automated Optical Inspection) catches soldering defects in-process
After JIT (12 months later):
- Component inventory value: ₹6 lakhs (76% reduction!)
- Freed up ₹19 lakhs working capital—used to purchase new reflow oven
- Warehouse reduced to 400 sq ft (saved ₹35,000/month rent)
- Zero obsolete inventory (components arrive weekly based on actual orders)
- Component expiry issues eliminated
- Slight increase in per-unit material cost (3% higher due to smaller order quantities) but offset by eliminated carrying costs
Challenges of JIT
1. Vulnerability to Disruptions
With no safety stock, any supply chain disruption stops production immediately.
- Supplier strike/shutdown: No buffer inventory to continue production
- Transportation issues: Traffic jam, floods, vehicle breakdown delays material delivery
- Pandemic/lockdown: COVID-19 exposed JIT vulnerability—factories couldn't operate when supplier cities locked down
Mitigation: Develop alternate suppliers, especially for critical components. Maintain minimal safety stock for A-category items.
2. Requires Supplier Discipline
JIT works only if suppliers are reliable. Indian supplier ecosystem often lacks this discipline—delays common, quality inconsistent.
Mitigation: Work closely with fewer, selected suppliers. Provide training, share forecasts, build long-term partnerships. Inspect incoming material rigorously initially until supplier proves consistent.
3. Limited Economies of Scale
Ordering small quantities frequently means higher per-unit costs (bulk discounts lost) and higher transportation costs (more frequent deliveries).
Mitigation: Calculate total cost—material price increase may be offset by carrying cost reduction. Negotiate with suppliers—if they deliver daily but manufacture weekly batches, they still get economies of scale.
JIT vs JIC (Just-in-Case)
| Aspect | Just-in-Time (JIT) | Just-in-Case (JIC) |
|---|---|---|
| Philosophy | Lean, minimal inventory | Safety stock to handle uncertainties |
| Inventory Levels | Very low, high turnover | High, lower turnover |
| Supply Chain | Highly reliable, close suppliers | Can handle unreliable suppliers |
| Risk | High disruption risk | Low disruption risk |
| Working Capital | Low (cash available) | High (cash locked in inventory) |
| Best For | Stable demand, reliable suppliers | Unpredictable demand/supply |
Modified JIT for Indian Context
Pure JIT (Toyota model) difficult in India due to infrastructure limitations, unreliable supplier ecosystem. Many Indian manufacturers practice "Modified JIT":
- Maintain small safety stock (3-7 days) instead of zero inventory
- Frequent deliveries from local suppliers, less frequent from distant ones
- Focus JIT on high-value, fast-moving items (A-category); keep higher stock of cheap items (C-category)
Getting Started with JIT
Don't try to implement JIT factory-wide overnight. Start small:
- Choose one product line or one component category as pilot
- Map current inventory levels and carrying costs
- Identify most reliable supplier for that category
- Negotiate weekly or bi-weekly deliveries (from monthly)
- Set up Kanban system with clear reorder triggers
- Monitor for 3 months—track stock-outs, inventory value, carrying cost savings
- If successful, gradually expand to other items
JIT is a journey, not a destination. Continuous improvement towards leaner operations while balancing risk and operational stability.
See Just-In-Time (JIT) in Action
Don't just read about Just-In-Time (JIT). See how Karygar automates this process to reduce manual work and errors on your factory floor.