Whatever happened to JIT? – Take Two.

Out of all the blog postings and LinkedIn discussions, the 12-22-09 “Whatever happened to JIT?” generated the richest discussion on LinkedIn. It was that good, that I have to write on the subject again for a second week in a row.

Really and truly, I wrote the first because I do not hear JIT bandied about much in the literature and trade magazines these days. My premise was that Lean had replaced it because Lean follows most of the same principles as JIT with the exclusion of continual reduction of cycle times. By extending the Supply Chain half way around the world, the major tenet of JIT was thrown out the window for lowest cost. Yet, even with an incredibly long supply chain the other principles, the Lean principles, are still used to minimize inventory and maximize service.

The bulk of the discussions took place on two groups on LinkedIn:

• The Logistics and Supply Chain Networking Group - 18 comments


• APICS The Association for Operations Management – 3 comments


• ISM – Purchasing & Supply Chain Manager Professionals – 2 comments


• AME Association for Manufacturing Excellent – 2 comments

 

Now a total of 25 comments is nowhere close to record setting, but I did generate good comments from some pretty smart folks. I enjoyed reading them and learned a few things as well.

Now, not all industries have had to import their materials and finished goods from Asia. I learned in video duplication, JIT can still apply. James Barbello of Walt Disney Home Entertainment wrote:

JIT is alive and well in many operations that have the correct geography and circumstance.

It is ironic that JIT is thriving in those Asian facilities making products that then have to be ordered to forecast months in advance and then held in the U.S. for weeks and months until orders arrive!

In Europe for example the Disney Home Entertainment print suppliers are literally next to our Technicolor DVD packaging sites and the printers actually do print and ship the exact number of dry goods needed for a job just prior to assembly.

In what other domestic industries is JIT still the modus operandi? Bread? Newspapers (as stressed as that industry is)?

Marvin Shuldiner who once worked for Toyota in the US wrote:

JIT falls apart where there is any variability in the system. I worked for 4 years trying to improve the inbound parts logistics into the NUMMI plant in California (RIP), when 80% of the North American parts were coming from the other side of the Rockies. Rail variability (and winter in the Rockies and Sierras) added unpredictability to the system and hence safety stock was added to the system. The parts coming from Japan to all the North American plants has significant safety stock built in.

JIT is a nice concept, but like anything else in logistics, it needs to be balanced against other needs. In the case I talk about, it is balancing inventory against shutting down the plant and against air freighting parts.

The key point here is the focus on reduction in variation:

• Reduction in Lead Times Raw and Packs to a day or hours.


• Reduces the amount of safety stock needed.


• Reduces the forecasting horizon dramatically and the variation inherent in forecasting over much longer periods of time.


• Reduction in Lead Times, Change Over Times, using Total Productive Maintenance, makes the entire Supply Chain more reliable i.e. minimizing the variability in the system.

 

There were many other wonderful comments. Some thought it was just another flavor of the month. One person pointed out JIT was always and still is alive in restaurants where attentive waitpersons are always filling our coffee cups.

Lastly, several folks pointed out that JIT is most alive and well in many of the Asian facilities where production has been outsourced and the management is enlightened.

So, I was wrong and right… as usual.

Thanks for the great comments and a Happy and Healthy 2010 to one and all.