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JUST IN TIME INVENTORY

Presented By:- Bhawan Singh Devesh Mishra Deepak Rajak Gauri Gupta Gaurav Singh

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Just In Time:- An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Inventory - .important assets that most businesses possess .turnover of inventory is the primary sources of revenue .generation and subsequent earnings for the company's shareholders/owners.

Just- In- Time, commonly known as “Toyota Production System”

JIT consists of 3 parts

JIT purchasing JIT manufacturing JIT distribution

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Examples of Just-in-Time Inventory

•Gift Basket Drop-Shipping –

•Fast-Food Restaurants- use just-in-time inventory to serve their customers on a daily basis during breakfast, lunch and dinner.

•Florist - can use a just-in-time inventory system to manager her orders, save time and money.

•Print-on-Demand Publishing - take advantage of just-in-time inventory by working with a printer that offers print-on-demand services.

•Computer Manufacturers - use just-in-time inventory to control the manufacturing and ordering of their computer systems.

http://smallbusiness.chron.com/examples-justintime-inventory-11970.html

use the just-in-time inventory system to service their customers.

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Type of Inventory:- The function of the inventory, the firm maintain the four type of Inventory Raw material inventoryWork in progress inventoryFinished goods inventory and Maintenance/repair/overhauling(MRO) supply.

Classification of InventoryCycle InventorySafety InventorySeasonal InventoryPipeline Inventory or Inventory Transit

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Inventory within the Supply Chain Network

Supplier IncludingSubcontracting and Direct site Movement

ProductionStock as materialWork in ProgressFinish goods

Factory/CFA warehouses

CustomersDistributionChannel/Retailers

Type of cost Associated with Inventory

Inventory Holding or Carrying Cost Taxes, insurance and shrinkage related costs Storage and handling costsOrdering CostCarrying cost

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Inventory ModelsInventory models for Independent DemandBasic economic order quantity(EOQ) modelProduction Order quantity modelQuantity discount model

Minimum Inventory=0

Order Quantity = Q (Maximum inventory Level

Usage Rate

Average Inventory on hand

Inventory

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Annual Cost

Set-up(order)Cost curve

Holding cost curve

Optimal order quantity

MinTotal cost

Curve for total cost of holding and setup

Q = Number of piece per orderQ* = Optimal number of piece per order (EOQ)D = Annual demand in units for the inventory itemd = Daily demand rate, or usage rateS = Setup or ordering cost for each orderH = Holding and carrying cost per unit per yeart = Length of production run in dayP = Daily production rateL = Order lead time

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How Just-in-time benefits your organisation.

Just-in-time is itself, based on four key principles that work together to support this unique concept at every level

Heijunka is the . elimination of uneve ness in workload (mura). . Heijunka also eliminates muri . Both mura and muri are thought of as types of muda

Waste (muda) is defined as anything that does not add value.

Takt time – the heartbeat of production Takt is the rate of customer demand. , determines the flow-rate and enables the calculation of how much work can be done.

The kanban card is a simple, highly visible device that the Toyota Production System uses to call-up components as they are required,

Heijunka Elimination of waste Takt time Kanban

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Just in time Efforts:- Following are the various JIT efforts

Cellular manufacturingMulti skilled workforceKaizen/continuous improvement set-up time reductionSmall-lot sizing Stable production schedulesTotal productive maintenance (TPM)Total Quality management (TOM)Vendor developmentKanbanStandard containersQuality circle

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Reason for Just In Time EffortsSimplifying stable production plan, or minimum variability High volume repetitive manufacturing Proximity of suppliers Rising inventory level To gain competitive advantage in the market

Mission of the Just In Time Elimination of in transit inventory Elimination of in plant inventory Elimination of unnecessary activities Elimination of redundant Reduce inventory Reduce lot sizes

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An inventory system designed to produce efficient output with minimum lead time at the lowest possible cost, minimizing waste, with great consistency.

Objectives: Create only want the customer

wants at the rate the customer needs them.

Produce at products of consistent high quality.

With minimal waste of labor, material, and equipment.

Process Overview

Take order

Manage Inventory

SalesForecasting

Order Completed

Served tothe customer

Pull inventoryPrepare order

Just-In-Time Inventory System

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Vendor Managed Inventory:- Vendor managed inventory (VMI) can be define as a Mechanism where the supplier create the purchase orders based on the demand information exchanged by the focal firm manufacture, retailer, or customer. VMI is a backward- replenishment model where the supplier does the demand Creation and demand fulfilment.

Advantage of Vendor Managed Inventory

Distributer BenefitsPlanning and ordering cost will decrease due to the responsibility being shifted to the Manufacturer.The overall service level is improved by having the right product at the right time.The manufacturer is more focused than ever on providing great service.

Manufacturer BenefitsVisibility of the Distributor’s Point of Sale data makes forecasting easier.Promotions can be more easily incorporated into the inventory plan.A reduction in Distributor ordering errors

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Advantages of JIT Less space required for stock Closer relationships with suppliers Reduced the cost of production Less vulnerability to fashion and

technology changes Reduction in stockholding costs Increase in cash flow Reduce the wastage

Disadvantages of JIT Danger of lost sales High dependence on suppliers Less time for quality control on arrival

of materials Increased ordering and admin costs May lose bulk-buying discounts It takes time to established

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To increase efficiency, Henry Ford had components and raw materials delivered to his factories just as they were needed.

Businesses that use just in time inventory strategies often utilize intermodal shipping systems.

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