Topic :- Just-In-Time & Kanban System

Submitted To:- Submitted By:-

Mr. Pardeep Kumar Parneet Walia
Lec. Of POM 175
MBA 2nd
JIT (Just-In-Time)

A strategy for inventory management in which raw

materials and components are delivered from the
vendor or supplier immediately before they are
needed in the manufacturing process.

An inventory strategy companies employ to increase

efficiency and decrease waste by receiving goods
only as they are needed in the production process,
thereby reducing inventory costs.
Elements of JIT
 Respect for the contribution that employees can
make.
 Good relationship with suppliers.
 A demand pull system in which material only
flows when needed.
 Kanban :- A Japanese method of controlling the
movement of materials through a JIT system.
 Reduction of set up times.
 Flexible work force.
 Reduce lead times & Preventive maintenance .
Emergence of JIT

 Evolved in Japan after World War II, as a result of

their diminishing market share in the auto industry.

 Toyota Motor Company- first to implement fully

functioning and successful JIT system, in 1970’s.

 Japanese Manufacturers looked for a way to

gain the most efficient use of limited resources. They
worked on "optimal cost/quality relationship.
 Functioning of JIT (how it works)

 Involves keeping stock levels to a

minimum
 Stock arrives just in time to be used in
production
 Works best where there is a close
relationship between manufacturer and
suppliers
 Goods not produced unless firm has an
order from a customer
 Aims to get highest volume of output at
the lowest unit cost.
Functioning of JIT (Contd.)

 A method of production control.

 No demand - no production!
 Anticipated/planned consumer demand
triggers production
 Finished goods assembled just in time to
be sold to customer
 Component parts assembled just in time to
become finished goods
 Materials purchased just in time to make
component parts.
Objectives of JIT

 To Reduce All Non-Value-Added Activities.

 Elimination Of In-Plant Inventory.

 Elimination Of In-Transit Inventory

 Quality And Reliability Improvement

Companies adopted JIT
Advantages of JIT

Capital not tied up in stocks

Less space required for stock
Closer relationships with suppliers
Reduced deterioration
Less vulnerability to fashion and
technology changes
Reduction in stockholding costs
Increase in cash flow
Disadvantages of JIT

 Danger of disrupted production due to non-

arrival of supplies
 Danger of lost sales
 High dependence on suppliers
 Less time for quality control on arrival of
materials
 Increased ordering and admin costs
 May lose bulk-buying discounts
What is kanban?

Kanban , also spelled kamban and literally

meaning "signboard" or "billboard", is a
concept related to just-in-time (JIT)
production. According to Taiichi Ohno, the
man credited with developing Just-in-time,
kanban is one means through which JIT is
achieved.
Kanban
Kanban is the Japanese word for card The
card is an authorization for the next container
of material to be produced A sequence of
Kanbans pulls material through the process
Many different sorts of signals are used, but
the system is still called a Kanban.
Kan “card”
Ban “signal”
Toyota's six rules

 Do not send defective products to the

subsequent process
 The subsequent process comes to withdraw
only what is needed
 Produce only the exact quantity withdrawn by
the subsequent process
 Level the production
 Kanban is a means to fine tuning
 Stabilize and rationalize the process
Why Consider Kanban Control ?

 Lower Inventory investment.

 Better “customer” service.
 Reduced Administrative costs.
Kanban card
KANBAN CARDS Kanban cards are a key
component of Kanban that utilizes cards to
signal the need to move materials within a
manufacturing or production facility or move
materials from an outside supplier to the
production facility. The Kanban card is, in
effect, a message that signals depletion
(reduce) of product, parts or inventory that
when received will trigger the replenishment of
that product, part or inventory.
Types of Kanban

 Production Kanban (P- Kanban)

authorizes production of goods
 Transportation Kanban (T-Kanban)

authorizes transporting a fixed amount of

product to downstream (customer)
 Kanban Square

a marked area designed to hold items

Types of Kanban (Contd.)

 Material Kanban
used to order material in advance of a process
 Supplier Kanban

rotates between the factory and suppliers.

Benefits of KANBAN

 Reduce Inventory.
 Product obsolescence.
 Reduce waste and scrap.
 Less over production.
 Provides flexibility in production.
 Reduce overall cost.