Just in Time

1644 Words7 Pages
1. Executive Summary

This report provides an analysis and evaluation of the Just-In-Time system, the advantages and disadvantages of the system and how it would benefit AG & Z. The Just-In-Time (JIT) system is a process where goods are ordered as required, as opposed to the currently used batch processing system where goods are made in bulk and stored in warehouses until sold. The Just-In-Time system was initially developed to not only cut down the amount of waste produced by other systems, which was seen as incurring unnecessary costs rather than adding value to the company, but to also meet customer demands with minimum delays. It has been found that when implemented correctly the JIT system can benefit the company in numerous
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In its simplest terms, the Kanban system is used to alert the production team exactly what needs to be produced, the quantity required and the designated time frame (Horngren, George & Srikant 1997).
5. Expected Results

The Batch Processing System currently used at AG & Z is a system where products are produced in bulk quantities or batches whether required by the customer or not. These goods are then stored in warehouses until required. This process produces large amounts of waste in both inventory and warehousing as the goods are not sold immediately, and could be required to be held for any length of time.
The Just in Time system however is a process that produces necessary products as required. This system is highly beneficial as it reduces the amount of inventory waste, as the goods are made to order. It also reduces warehousing costs as the goods are made and shipped directly to the customer rather than being held for extended periods at the warehouse.
As a result of these benefits, the JIT system has been particularly effective for companies with a high customer demand on newly developed technologies such as computers. If the product is produced when required and as specified by the customer, this not only allows the customer to order exactly what they want with modern technology, but it also benefits the manufacturer who is guaranteed a return on the goods straight

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