JIT manufacturing

JIT (just-in-time) manufacturing is a strategy where raw materials and other components are only produced or sent to the production process when needed.
JIT businesses that only manufacture an item if a customer wants it are by extension more responsive to their needs. The strategy also minimizes waste and reduces the amount of inventory sitting idle in a warehouse or distribution facility.
Two successful implementations of JIT manufacturing include Dell and CPG giant Procter & Gamble.

Table of Contents

Understanding JIT manufacturing

JIT (just-in-time) manufacturing is a strategy where raw materials and other components are only made or sent to the production process when needed.

JIT manufacturing can trace its roots back to post-World War 2 Japan. Once the war ended, the country found itself in a situation where it lacked the resources to finance mass production. There was also a shortage of natural resources and high unemployment.

For businesses to survive in this environment, operations were scaled back. Smaller factories transformed fewer raw materials into similarly small amounts of finished product, which enabled them to reduce financial risk and better manage their working capital.

Just-in-time manufacturing is a strategy that requires discipline, structure, and specific processes. To produce what is needed, when it is needed, and in the exact quantity required, JIT manufacturing is a pull-based strategy where production is only initiated when there is demand from the customer. This contrasts with a push-based system where a business produces the item first based on forecast demand.

JIT businesses that only manufacture an item if a customer wants it are by extension more responsive to their needs. The strategy also minimizes waste and reduces the amount of inventory sitting idle in a warehouse or distribution facility. In the latter case, it reduces storage costs and the likelihood that inventory is damaged or becomes obsolete whilst awaiting sale.

Other characteristics of JIT manufacturing

In addition to restricting inventory, some key JIT characteristics include:

Elimination of defects.
Close collaboration with manufacturers and suppliers who must also be flexible and responsive.
Cellular manufacturing – a subsection of JIT where workstations are arranged in sequence to support the smooth movement of materials and components.
The active management of flow by limiting batch sizes (balanced flow).
Multi-functional workers with diverse skillsets.
Control by visibility – where visual tools improve communication.
Housekeeping and physical organization.
Streamlining the movement of materials.

JIT manufacturing use cases

Automotive Manufacturing:
- Efficient production based on customer demand.
- Reduces inventory costs.
Electronics Assembly:
- Manages rapid technological advancements.
- Ensures product freshness.
Fast-Food Restaurants:
- Minimizes food waste.
- Optimizes kitchen operations.
Aerospace Manufacturing:
- Reduces storage costs.
- Ensures quality control.
Fashion and Apparel Industry:
- Reduces risk of unsold items.
- Important in trend-driven industry.
Pharmaceutical Manufacturing:
- Ensures product quality.
- Minimizes drug expiration risk.
Print-on-Demand Services:
- Eliminates large pre-made inventories.
- Offers customization options.
Construction Projects:
- Reduces excess material storage.
- Minimizes risk of theft or damage.
Retail Inventory Management:
- Optimizes supply chains.
- Reduces overstock and understock situations.
Medical Supplies and Equipment:
- Efficient resource allocation.
- Minimizes waste in healthcare settings.

JIT manufacturing examples

JIT has been popularized in the West as part of the Toyota Production System (TPS), but in truth, many other companies use the strategy to great effect.

Here are two examples.

Dell

Computer manufacturer Dell was likely the first in its industry to implement JIT manufacturing. When an order is placed for a computer on Dell’s website, demand is created and the production of a custom computer commences.

Dell does not manufacture all of the numerous components that go into its products. To ensure parts arrive on time and as they are needed, the company has adopted aspects of a push-based system. In this case, algorithms that predict sales volume are utilized by component suppliers to anticipate production volume.

Procter & Gamble

Consumer-packaged goods powerhouse Procter & Gamble also uses JIT manufacturing. While other companies manage their supply chains with 30-day demand forecasts, Procter & Gamble uses an approach called robust continuous planning where demand is matched with supply more frequently.

For Tide – one of the company’s laundry detergent brands – demand/supply matching occurs multiple times per day. For other products with global supply chains such as Oral-B toothbrushes, the cycle spans a matter of weeks. In either case, the company is more agile and responsive to customer needs.

The company has not revealed the finer details of its JIT strategy, but Forbes theorized that factories run at 90 to 95% capacity with the remainder used to respond to fluctuations in demand. One example mentioned in the article is a retail customer request for an incremental promotion, which a P&G rep claimed it could respond to in a matter of minutes.

Key Highlights

Definition of JIT Manufacturing:
- JIT manufacturing is a strategy where raw materials and components are produced or sent to production only when needed.
- It reduces waste, minimizes inventory, and improves responsiveness to customer needs.
Origins of JIT Manufacturing:
- JIT manufacturing originated in post-World War 2 Japan due to resource limitations and unemployment.
- Smaller factories scaled back operations to manage risk and working capital efficiently.
Principles of JIT Manufacturing:
- JIT is a pull-based strategy, producing based on actual customer demand.
- It contrasts with push-based systems that produce based on forecast demand.
Benefits and Characteristics:
- JIT reduces waste and inventory storage costs.
- It emphasizes defect elimination, collaboration with suppliers, cellular manufacturing, flow management, and multi-functional workers.
Toyota Production System (TPS):
- JIT is a key part of the Toyota Production System (TPS), popularized in the West.
- TPS emphasizes efficient production and minimizing waste.
JIT Examples:
- Dell: Dell uses JIT manufacturing for custom computer orders placed on its website. Component suppliers predict production volume using algorithms.
- Procter & Gamble: P&G employs JIT for consumer-packaged goods like Tide and Oral-B. It matches demand and supply frequently, adapting to customer needs.
P&G’s Approach:
- P&G utilizes robust continuous planning to match demand and supply more frequently.
- The company remains agile by running factories at high capacity and allocating a portion for responding to demand fluctuations.

Related Frameworks, Models, or Concepts	Description	When to Apply
Just-In-Time (JIT) Manufacturing	– Just-In-Time (JIT) Manufacturing is a production strategy aimed at minimizing waste, reducing inventory, and improving efficiency by producing goods only as needed, in the right quantity, and at the right time. – JIT emphasizes continuous improvement, flexibility, and responsiveness to customer demand, enabling companies to operate with lower inventory levels, reduced lead times, and improved quality. – JIT principles include eliminating waste, synchronizing production with demand, maintaining a smooth and efficient flow of materials and information, and empowering employees to identify and solve problems proactively.	– When seeking to optimize production processes, reduce inventory costs, and improve operational efficiency. – To respond quickly to changing customer demand and market conditions while minimizing waste and maximizing value. – To foster a culture of continuous improvement, teamwork, and waste reduction throughout the organization.
Lean Manufacturing	– Lean Manufacturing is a production methodology inspired by JIT principles, focusing on maximizing customer value while minimizing waste through the systematic elimination of non-value-added activities and processes. – Lean principles, such as value stream mapping, 5S methodology, and Kaizen (continuous improvement), guide organizations in streamlining operations, improving quality, and increasing productivity. – Lean Manufacturing emphasizes the importance of employee involvement, standardized work, and visual management to create a culture of efficiency, problem-solving, and continuous improvement.	– When optimizing manufacturing processes and operations to deliver maximum value to customers with minimal waste. – To identify and eliminate inefficiencies, bottlenecks, and non-value-added activities in production processes. – To cultivate a culture of continuous improvement, teamwork, and customer focus throughout the organization.
Kanban System	– The Kanban System is a visual management method for controlling and improving workflow by visualizing work, limiting work in progress (WIP), and optimizing the flow of tasks or items through the production process. – Kanban boards, typically consisting of columns representing different stages of the workflow and cards representing work items, provide a real-time visualization of work status and help teams identify bottlenecks and optimize resource allocation. – The Kanban System promotes pull-based scheduling, where work is pulled into the system based on capacity and demand, enabling teams to balance workload, reduce lead times, and improve overall efficiency.	– When managing and optimizing workflow in manufacturing or production environments. – To visualize work, limit work in progress, and identify and resolve bottlenecks and inefficiencies. – To promote continuous improvement, flexibility, and efficiency in delivering value to customers.
Total Quality Management (TQM)	– Total Quality Management (TQM) is a management approach focused on continuously improving the quality of products, processes, and services to meet or exceed customer expectations. – TQM principles include customer focus, continuous improvement, employee involvement, and process management, emphasizing the importance of prevention, teamwork, and data-driven decision-making in achieving quality excellence. – TQM seeks to embed a culture of quality throughout the organization, empowering employees to take ownership of quality and driving improvements at every level of the organization.	– When striving for excellence in product quality, process efficiency, and customer satisfaction. – To establish a culture of quality, continuous improvement, and customer focus throughout the organization. – To empower employees to identify and solve quality-related issues proactively and drive improvements in products and processes.
Six Sigma	– Six Sigma is a data-driven methodology for improving process performance and reducing defects by systematically identifying and eliminating variation and defects in production processes. – Six Sigma uses a structured problem-solving approach, DMAIC (Define, Measure, Analyze, Improve, Control), to define project goals, measure process performance, analyze root causes of defects, implement improvements, and sustain results over time. – Six Sigma aims to achieve near-perfect quality by reducing defects to a level of fewer than 3.4 defects per million opportunities (DPMO), emphasizing statistical analysis, process control, and continuous monitoring to drive improvements.	– When striving for excellence in process quality, consistency, and reliability. – To identify and eliminate defects, errors, and variation in production processes systematically. – To drive continuous improvement and sustain results over time through data-driven decision-making and process control.
Theory of Constraints (TOC)	– The Theory of Constraints (TOC) is a management philosophy that focuses on identifying and addressing bottlenecks, or constraints, in production processes to maximize throughput, efficiency, and profitability. – TOC principles include identifying constraints, exploiting constraints to maximize throughput, subordinating non-constraints to the pace of the constraint, elevating the constraint, and repeating the process to continuously improve overall system performance. – TOC emphasizes the importance of system thinking, focusing resources on the most significant constraints, and balancing flow, inventory, and operational expenses to optimize overall performance.	– When managing complex production systems with constraints that limit throughput and efficiency. – To identify and address bottlenecks systematically to maximize throughput, minimize lead times, and improve overall system performance. – To adopt a holistic approach to managing production processes, balancing flow, inventory, and operational expenses to optimize performance.
Continuous Improvement (Kaizen)	– Continuous Improvement, or Kaizen, is a philosophy and practice of making small, incremental improvements to processes, products, or services over time to achieve excellence and drive sustainable growth. – Kaizen emphasizes the involvement of all employees in identifying problems, generating ideas, and implementing solutions to improve quality, efficiency, and customer satisfaction. – Kaizen promotes a culture of learning, experimentation, and empowerment, encouraging organizations to embrace change, challenge the status quo, and pursue excellence relentlessly.	– When striving for continuous improvement and excellence in all aspects of operations and performance. – To empower employees at all levels to identify problems, suggest improvements, and implement solutions proactively. – To foster a culture of learning, collaboration, and innovation that drives sustainable growth and competitive advantage.
Poka-Yoke (Error Proofing)	– Poka-Yoke, or Error Proofing, is a technique used to prevent errors or mistakes from occurring in production processes by designing foolproof mechanisms or systems that prevent or detect errors before they result in defects. – Poka-Yoke devices or mechanisms are designed to be simple, reliable, and easy to use, making it difficult or impossible for operators to make mistakes or produce defective products. – Poka-Yoke helps organizations improve quality, reduce waste, and increase productivity by eliminating the need for rework, inspection, or corrective actions.	– When seeking to improve quality, reliability, and efficiency in production processes. – To prevent errors, defects, and mistakes from occurring by designing foolproof mechanisms or systems. – To empower operators to produce defect-free products consistently and reliably through error-proofing techniques and devices.
5S Methodology	– The 5S Methodology is a systematic approach to workplace organization and standardization that involves Sort, Set in Order, Shine, Standardize, and Sustain. – 5S aims to create a clean, organized, and efficient work environment by eliminating clutter, arranging tools and materials systematically, maintaining cleanliness, establishing standard procedures, and sustaining improvements over time. – 5S helps organizations improve safety, productivity, and morale by fostering a culture of discipline, orderliness, and continuous improvement in the workplace.	– When seeking to organize and optimize workspaces, processes, and workflows for efficiency and safety. – To eliminate waste, improve productivity, and enhance employee morale through workplace organization and standardization. – To establish a culture of discipline, orderliness, and continuous improvement in the workplace through the adoption of 5S principles and practices.
Total Productive Maintenance (TPM)	– Total Productive Maintenance (TPM) is a holistic approach to equipment maintenance and reliability that aims to maximize equipment uptime, minimize breakdowns, and optimize overall equipment effectiveness (OEE). – TPM principles include autonomous maintenance, planned maintenance, quality maintenance, early equipment management, and training and education, focusing on empowering operators to take ownership of equipment, preventing defects, and improving reliability. – TPM helps organizations reduce downtime, improve product quality, and increase productivity by fostering a proactive approach to equipment maintenance and management.	– When seeking to maximize equipment uptime, minimize breakdowns, and optimize overall equipment effectiveness. – To empower operators to take ownership of equipment, prevent defects, and improve reliability through proactive maintenance practices. – To foster a culture of teamwork, accountability, and continuous improvement in equipment maintenance and management.