Benefits of JIT
JIT is basically the theory that items are delivered to the required point at the correct time and in correct quantities. The main aim of JIT is to minimize waste linked with inventory and thus stock ought to be delivered and components or goods manufactured just in time. There are various losses linked with inventory such as transactional processing, management resource as well as storing items that are not yet needed. JIT tries to focus on items at the correct time at the correct place in the correct amount. The following are a couple of benefits of using the JIT principles.
1. Stops over production
Through using the JIT principles, it is highly likely that you will be able to maximize your production while steering away from over production. This can be attributed to the fact that you will only be purchasing what you require at the specific time that you need it and this will ensure that you are not storing the items but using them for more gains.
2. Rationalizes costs of labor
The business or company is going to save a lot of money since it will not be paying workers to manufacture materials that do not have an immediate use. The employees will only be focused on the items at hand and thus it increases the quality of items produced.
3. Motivates employees
Employees are usually motivated by specific targets and goals related to the production targets. JIT will assist keep the employees motivated since the produced goods should be produced within a certain frame of time.
4. Improves material flow
JIT facilitates better inventory management and thus reduces the delays in the completion of products for distribution.
The main disadvantage to this particular operating style is that the levels of re-order are determined by previous levels of demand. As a result, if there is an increase in demand, stocks can be depleted and this will lead to unhappy customers.