Philosophy
The philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden cost of keeping inventory, and are therefore not a simple solution for a company to adopt. The company must follow an array of new methods to manage the consequences of the change. The ideas in this way of working come from many different disciplines including statistics, industrial engineering, production management, and behavioral science. The JIT inventory philosophy defines how inventory is viewed and how it relates to management.
Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting. This does not mean to say JIT is implemented without an awareness that removing inventory exposes pre-existing manufacturing issues. This way of working encourages businesses to eliminate inventory that does not compensate for manufacturing process issues, and to constantly improve those processes to require less inventory. Secondly, allowing any stock habituates management to stock keeping. Management may be tempted to keep stock to hide production problems. These problems include backups at work centers, machine reliability, process variability, lack of flexibility of employees and equipment, and inadequate capacity.
In short, the Just-in-Time inventory system focus is having “the right material, at the right time, at the right place, and in the exact amount”-Ryan Grabosky, without the safety net of inventory. The JIT system has broad implications for implementers.
Read more about this topic: Just In Time (business)
Famous quotes containing the word philosophy:
“Nature in darkness groans
And men are bound to sullen contemplation in the night:
Restless they turn on beds of sorrow; in their inmost brain
Feeling the crushing wheels, they rise, they write the bitter words
Of stern philosophy & knead the bread of knowledge with tears & groans.”
—William Blake (1757–1827)
“Philosophy can be compared to some powders that are so corrosive that, after they have eaten away the infected flesh of a wound, they then devour the living flesh, rot the bones, and penetrate to the very marrow. Philosophy at first refutes errors. But if it is not stopped at this point, it goes on to attack truths. And when it is left on its own, it goes so far that it no longer knows where it is and can find no stopping place.”
—Pierre Bayle (1647–1706)
“And new Philosophy calls all in doubt,
The element of fire is quite put out;
The Sun is lost, and th’earth, and no mans wit
Can well direct him where to look for it.”
—John Donne (c. 1572–1631)