Is a production & inventory control system in which materials are purchased & units are produced only as needed to meet actual customer demand.
First developed & perfected within the Toyota manufacturing plant by Taiichi Ohno. Concept based on the pull pull approach viz the flow of goods is controlled by a pull approach.
Concept states that an activity should take place only when there is a need for it
Hence inventory should be brought into the system only when it is required
JIT is supported by concepts such as Kanban, Jidoka, Poka Yoke and Vendor Managed Inventory.
When Companies use JIT manufacturing & inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In JIT manufacturing system inventories are reduced to the minimum and in some cases are zero zero JIT approach can be used in both manufacturing and merchandising companies. It is ideally suited for operations of manufacturing companies which maintain three class of inventories- raw materials, work-in-progress, and finished goods.
Several Indian firms have successfully implemented or are in the process of implementing JIT.
Toyota Kirloskar Motors Ltd. has successfully implemented JIT in India through a new company Trans system Logistics International Ltd. which provides complete logistics solutions. Maruti Udyog Ltd inventories vary from 2 hours stock for items like car seats, bumpers & steering systems to a two-month level for nuts & bolts
For manufacture of Nano, Tata Motors moved out of Singur in West Bengal and selected Sanand in Gujarat, where a significant chunk of land has been set aside for over 35 odd vendors who work very closely to implement JIT.