Just-in-time (JIT)

Supply Chain Management

Japan
4
Just-in-time in Manufacturing

Toyota
Production
System
Produce only
what is needed,
when it is
needed, and only
in the amout of
what is needed
“no demand, no
production”
 JIT avoids

Overproduction

Waiting for material

Holding excess inventory

 Inventory control

Manufacturing PUSH costumer

Manufacturing costumer
PULL
 Just in time in supply chain

Information is relayed to Parts are shipped to the Goods are directly

Costumer orders the
the supplier from the Assemply/Manufacturing shipped and not stored in
product
company plant a warehouse
results

No Expenses match revenues with a

inventory receivables turnaround in 3 days
advantage

Less space
needed

Waste
reduction

Smaller
investments
disadvantage

Risk of running our of stock

Lack of cotrol over time frame

More planning required

 Fixed bill of materials
Linear and constant demand of
products
Small product line

Vendor base must be close

Ramp up production to volume Strictly Logistics Costs
Summary
◉ To make the JIT workable,
management must rethink the entire
workflow of the company, from the
intake of raw materials to the final finish
product. At the same time, Supply-
Chain relationships might require
multiple supplier, closer locations, and
supplier that can provide materials with
minimal notice.
Facility Location

The location of the facility plays a vital role in the success of logistics networks.
◉ Expanding existing facility
◉ Building a new facility
Vendor base must be close
◉ Moving to another facility
◉ Addition of one or more facilities to the
existing network in order to expand capacity
◉ Closing of one or more facility in order to
shrink capacity
 Location decision: strategically
important

Long term decision

Effect capacity and flexibility

Represent commitment of resources

Impact competitive advantage

Important to supply chain

Effect operation, operating cost and revenue

Effect operation, operating cost and revenue

Impact competitive advantage

Important to supply chain

Factors that influence a
company’s FL decision

Customer proximity
Business area

Availability of skilled labor

Suppliers

Environment and government policies

Thank you! Have a nice day!

Prepared by: Nicole Hernandez

Atienza