JIT Just in Time \'To

JIT

Just in Time

'To gain a competitive edge, many organizations in the high tech sector now focus on quality and cycle time by employing JIT (Just in Time). As a result, a traditional accounting system may not be appropriate. They now have to focus on the value of controlling non-financial performance as a key to improving productivity (delivery).' Discuss, using actual situations in your organization, or others that you are familiar with, to illustrate how quality, cycle time and productivity are related.

Traditional methods of cost accounting and cost reduction focus on reducing costs, either by slashing input costs such as labor and shipping or finding cheaper input raw maters. However, Just in Time (JIT) manufacturing focuses on making production processes more efficient, reducing inventories to only what is needed, and continually improving quality. It was originally developed by the Toyota Corporation, and is frequently cited as a key part of that organization's domination of the world automotive market. Although the principles of JIT are usually only applied to fairly simple rote processes, they have proved uniquely successful in organizing those rote processes to produce highly sophisticated machinery.

"Waste results from any activity that adds cost without adding value, such as the unnecessary moving of materials, the accumulation of excess inventory, or the use of faulty production methods that create products requiring subsequent rework" (Ashland 2006). Creating a uniform flow of activity ensures that no part of the production process gets 'backed up,' and makes the need for a part clog the flow of 'traffic' through the plant. JIT workplaces are highly coordinated. To create such a flow, work stations should be as close together as possible, and workers must have a diversity of skills so they can be easily switched from one station to another. Workers must never remain idle -- instead, the workers should be shifted to maintaining the equipment and to brainstorming ways of improving other activities at the firm. However, although much is demanded of workers, quite often the tasks they must perform are very simple, again to reduce error, which also reduces the costs of production. Many JIT factories contain fail-safe mechanisms such as providing all workers with a box in which to put the component parts of the items they are assembling -- if a part is left in the box, the worker knows that he or she has forgotten to include it.

High standards of quality lessen the need to 'do things over' which can also slow down the production line. To ensure that high standards are maintained, a low inventory means that there are few excess parts. This demand for accuracy keeps costs downs, and the pressure high upon workers not to 'slack off.' Moving needed components to workstations is coordinated in a careful and systematic process. Often there are workers on the floor whose sole responsibility is to ensure that the production floor moves smoothly. This responsiveness is echoed in the organization's JIT responsiveness to consumer demand. Responsiveness to the market means lower costs because of lower inventories in general of unwanted products. No parts are made without authorization. Keeping unwanted inventory low is especially valuable for technical companies, where products rapidly grow obsolete, like computers.