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:
“What is rational is actual and what is actual is rational. On this conviction the plain man like the philosopher takes his stand, and from it philosophy starts in its study of the universe of mind as well as the universe of nature.”
—Georg Wilhelm Friedrich Hegel (1770–1831)
“Every philosophy is tinged with the colouring of some secret imaginative background, which never emerges explicitly into its train of reasoning.”
—Alfred North Whitehead (1861–1947)
“There is a constant in the average American imagination and taste, for which the past must be preserved and celebrated in full-scale authentic copy; a philosophy of immortality as duplication. It dominates the relation with the self, with the past, not infrequently with the present, always with History and, even, with the European tradition.”
—Umberto Eco (b. 1932)