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:
“Of your philosophy you make no use
If you give place to accidental evils.”
—William Shakespeare (1564–1616)
“If this is philosophy it is at any rate a philosophy that is not in its right mind.”
—G.C. (Georg Christoph)
“Methinks it would be some advantage to philosophy if men were named merely in the gross, as they are known. It would be necessary only to know the genus and perhaps the race or variety, to know the individual. We are not prepared to believe that every private soldier in a Roman army had a name of his own,—because we have not supposed that he had a character of his own.”
—Henry David Thoreau (1817–1862)