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:
“How can you tell if you discipline effectively? Ask yourself if your disciplinary methods generally produce lasting results in a manner you find acceptable. Whether your philosophy is democratic or autocratic, whatever techniques you use—reasoning, a “star” chart, time-outs, or spanking—if it doesn’t work, it’s not effective.”
—Stanley Turecki (20th century)
“All roads are blocked to a philosophy which reduces everything to the word “no.” To “no” there is only one answer and that is “yes.” Nihilism has no substance. There is no such thing as nothingness, and zero does not exist. Everything is something. Nothing is nothing. Man lives more by affirmation than by bread.”
—Victor Hugo (1802–1885)
“The real discovery is the one which enables me to stop doing philosophy when I want to.—The one that gives philosophy peace, so that it is no longer tormented by questions which bring itself into question.”
—Ludwig Wittgenstein (1889–1951)