Notes On Jit Inventory Systems Essay

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Introduction Just-in-time is a concept developed by Toyota and introduced during the 1950s and 1960s that has the characteristics of a pull system, meaning required inventory is only produced or used when demand is “pulling” to do so. After the inventory is used up, only what is needed to replace what has been used is manufactured. Because goods are only produced to keep up with demand, there is minimal inventory which can cause a reduction in overhead and an increase in responsiveness. JIT systems are based on the pull concept rather than the push concept, where products are manufactured in advance in anticipation that there will be a consumer demand (Collier 379). Many companies are motivated to implement just-in-time, or JIT, systems because it avoids time, cost, overhead and forecasting that is associated with keeping inventory on hand much like a push system (Kokemuller). Importance JIT inventory systems have the ability to stabilize operating system because a steady rate of output can be used to meet demand on a smaller scope and create a sense of consistency in inventory sizes. Within manufacturing of a good, JIT systems prohibit specific workstations to push a product through to the next step unless there is a need for said product. Only focusing on small batches allows for manufactures to reduce inventory needed throughout the production process which can greatly reduce costs, especially costs associated with housing inventory (Collier 380). One major

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