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Just-in-time: definition & important aspects
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Just-in-time to the point:
Just-in-time is a logistics concept in which materials and components are delivered and processed exactly when they are needed. For purchasing, this means precise coordination with suppliers and minimized warehousing costs, while at the same time ensuring security of supply.
Example: A car manufacturer receives three deliveries a day from its seat manufacturer, each containing 120 seats, which are delivered exactly 4 hours before the scheduled installation, thus reducing storage costs by 75% and optimizing the production area by 300m².
Contents
What is Just in Time?
Just in Time (JIT) is a production and procurement principle that aims to deliver materials and products exactly when they are needed. The main aim of JIT is to minimize stock levels, reduce production costs and increase the efficiency of the supply chain. Close coordination between production and procurement enables companies to optimize their processes and react flexibly to market changes.
Importance of Just in Time for companies
The just-in-time principle offers numerous advantages for buyers:
- Cost reduction: By minimizing stock levels, storage costs and capital commitment are reduced.
- Flexibility: JIT enables rapid adaptation to fluctuations in demand and market changes.
- Quality improvement: Close cooperation with suppliers promotes quality control and continuous improvement.
- Increased efficiency: Optimized processes lead to higher productivity and shorter throughput times.
Just in time process
There are various processes that can be used within the framework of the just-in-time principle:
Kanban system: A visual control system that controls the flow of materials and production.
One-piece flow: Production of individual pieces to speed up throughput and reduce waste.
Pull system: Production and procurement are based on actual demand instead of forecasts.
Continuous Improvement (Kaizen): Constant improvement of processes to increase efficiency and quality.
Just in time delivery
Just-in-time delivery plays a central role in the JIT principle. It requires close coordination with suppliers to ensure that materials are delivered exactly when they are needed. This requires reliable suppliers, precise planning and effective communication. Successful JIT delivery leads to smooth production and minimizes the risk of production interruptions.
Whitepaper: Just-in-Time Production - Optimization and implementation of modern manufacturing processes
Just-in-time: from traditional warehousing to real-time delivery
Based on the theoretical concept of just-in-time (JIT), the practice of material procurement and provision has changed fundamentally. The practical significance lies in the significant reduction of stock levels and the increase in process efficiency. While traditional methods were based on extensive stockpiling, the market today requires fast response times and a high degree of flexibility. This necessitates a transformation towards demand-driven delivery processes.
Old: Traditional warehousing
Traditional approach: In traditional warehousing, materials and products were ordered and stored in large quantities in order to be able to deliver at any time. Companies used extensive warehouses and relied on safety stocks to cushion fluctuations in demand and delivery times. The processes were often manually controlled, supported by simple warehouse management systems. The main characteristics were high storage costs, long capital commitment periods and the risk of stock obsolescence. Challenges arose in particular due to limited flexibility and slow adaptability to market changes.
New: Just-in-Time (JIT)
Just-in-time: The modern implementation of JIT is revolutionizing the supply chain by synchronizing demand and delivery. Materials are delivered exactly when they are needed, which is made possible by close digital networking with suppliers and real-time data. Key innovations include the use of ERP systems, EDI (Electronic Data Interchange) and Kanban systems to control the flow of materials. Practical benefits include significant cost savings through reduced warehousing, increased flexibility and improved product quality through faster feedback loops. This enables companies to react more agilely to customer requirements and increase their competitiveness.
Practical example: Automotive industry
A renowned automotive company successfully implemented the just-in-time principle in its production. By introducing Kanban systems and integrating suppliers into its own ERP system, it was able to reduce stock levels by over 50%. At the same time, production capacity utilization improved by 20%, as materials arrived exactly when they were needed. This change led to annual savings of several million euros and significantly reduced the time to market for new models. The increased efficiency and flexibility enabled the company to respond better to individual customer requests and increase customer satisfaction.
Conclusion: Just in time as a key strategy in purchasing
Just in Time is a powerful production and procurement management strategy that helps companies minimize inventory, reduce costs and increase supply chain efficiency. By precisely coordinating production and procurement, companies can react more flexibly to market changes and continuously improve the quality of their products. Despite the numerous benefits, JIT also presents challenges, particularly in terms of dependence on reliable suppliers and the complexity of planning. Successful implementation requires careful planning, close collaboration with suppliers and the use of modern technologies. By implementing the principles and best practices presented in this guide, you can effectively integrate the Just in Time principle into your company and optimize your purchasing processes in the long term. Use the advantages of Just in Time to increase your competitiveness and ensure long-term success.
