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Just-in-time (JIT) is a philosophy of production based on the concept of adding value and eliminating waste. JIT and lean manufacturing have very similar goals. Value is added only by work performed on the product, and waste is anything other than a minimal amount of necessary resources—material, manpower, and the capital equipment—that is required for production, and does not add value to the product. The process called Kanban is a system where cards are used between send and receive stations in a way so that the stations produce only the necessary quantity of goods at the necessary time. JIT examples are presented where the components to a product are received from a supplier shortly after the customer order arrives. The relation between lean manufacturing and JIT is described. Smaller batch sizes are preferred in production, and this is accomplished as the setup time at a production process is reduced. The smaller the setup time, the lower the economic batch size. The safety stock to achieve a service level to the customer depends largely on the lead-time of replenish time from the supplier. As the lead-time becomes smaller, the amount of safety stock needed is lowered accordingly. The management should also seek to level the week-to-week aggregate production loads to avoid excess cost of overtime, backorders and outsourcing. When the finished good items are on a make-to-order basis, the strategy of postponement reduces the lead-time to the customers, and also eliminates much of the complication in the assembly.
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Nick T. Thomopoulos
- Chapter 8
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