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A complete JIT system begins with production, includes deliveries to a company’s production facilities, continues through the manufacturing plant and even includes the types of transactions processed by the accounting system.
(i) The company must ensure that it receives it supplies on time, preferably directly at the production facility that needs them. The company engineers must assist suppliers at their premises and ensure defect free supplies. Thus raw material inventory is reduced if correct quantities are delivered as per production schedules.
(ii) Long set-up times are reduced into short ones by eliminating inefficiency. Thus the WIP is reduced and so is the number of products before defects are identified.
(iii) A ‘Kanban’ card, which authorizes production of the right quantity by its feeder machine ensures ‘pulling’ the production process and elimination of inventory.
Another method is the introduction of a working cell, which is a cluster of machines run by a single trained operator. This also identifies defects quickly and reduces maintenance costs. Both methods are used together.
(iv) Work force is trained to be empowered to halt operations understand more about the system, product flow, different machines and thus, elaborate reporting of a past variance is eliminated.
(v) Suppliers may be paid based on production units adjusted for defects.
