Benefits of Just In Time Production
Just-in-Time production, popularly known as JIT is a common business strategy that aims to maximum returns by reducing carrying costs and inventory. This strategy seeks to improve quality and reduce waste, bringing an array of benefits in production. Read on and find out why most companies implement just in time production.
1. Reduces costs
Just in time production primarily helps reduce storages costs. Many companies have come to the realization that buying only the components or raw materials they need, improves cash flow. Similarly, storing fewer finished produce helps reduce space requirements. The same case also applies to retail; suppliers have to sign up to deliver in time to reduce costly storage requirements.
2. Improves productivity
While it might seen a disheartening prospect, re-organizing production geared towards implementing Just in Time work can help improve discipline for companies that desire to excel. This way, a company can evaluate how to improve production by looking for effective ways of restructuring working practices.
3. Better competitive advantage
Just in Time production also helps improve the flexibility of your business by improving communication between suppliers and customers, in order to react promptly to competitive market demands. Many companies attest that increased customer satisfaction is evident after adopting this way of production. In other words, implementing Just in Time in production can help move your business towards a new level.
4. Eliminates misconception
This system of production improves effective communication between suppliers and the business, specifying the product required as well as the expected quantity and time of delivery. By doing so, any miscommunication or misunderstanding is done away with.
5. Minimizes waste in production
Just in Time in production also aims to reduce waste in production as well as improving quality in production.
When it comes to Just in Time production, suppliers play an essential role to ensure the stock delivered as expected to avoid delaying production.