May 27, 2014 | Posted by Matt Elson
The philosophy of Just-In-Time is a simple one. Unused inventory held in storage of is a waste of resources. Just-In-Time inventory systems eliminate the forgotten cost of keeping inventory. This is not a simple solution for a company to just adopt on a whim, a transfer to Just-In-Time system is a delicate procedure. The company must follow a multitude of new methods to manage this change. The philosophy of Just-In-Time inventory changes how we view the relationship between inventory and management.
A Pull system for your inventory is the essence of Just-In-Time production,
Push system based inventories are a thing of the past.
Inventory is seen as incurring costs, or chipping away at the value of the product, instead of adding value. This is contrary to traditional account of inventory being seen as a profit in waiting. When Just-In-Time is implemented the removing of inventory exposes pre-existing manufacturing issues and challenges management to right these now very painful wrongs. With no “extra” inventory to fall back on orders can be missed if action is not taken to improve broken processes. This way of working encourages businesses to continuously improve their processes to require less inventory. In the past it was popular for management to keep stock to hide production problems. Problems like machine reliability, process variability, lack of flexibility of the equipment and/or the system, inadequate capacity or a lack of human development
Quite simply a Just-in-Time inventory system is having “the right material, at the right place, at the right time, and in the exact amount”, to produce the product when needed making it easier to,