JUST-IN-TIME PRODUCTION
The idea of producing the necessary units in the necessary quantities at the necessary time is described by the short term Just-in-time. Just-in-time means, for example, that in the process of assembling the parts to build a car, the necessary kind of sub-assemblies of the preceding processes should arrive at the product line at the time needed in the necessary quantities. If Just-in-time is realized in the entire firm, then unnecessary inventories in the factory will be completely eliminated, making stores or warehouses unnecessary. The inventory carrying costs will be diminished, and the ratio of capital turnover will be increased. However, to rely solely on the central planning approach which instructs the production schedules to all processes simultaneously, it is very difficult to realize Just-in-time in all the processes for a product like an automobile, which consists of thousands of parts.
Therefore, in Toyota system, it is necessary to look at the production flow conversely; in other words, the people of a certain process go to the preceding process to withdraw the necessary units in the necessary quantities at the necessary time. Then what the preceding process has to do is produce only enough quantities of units to replace those that have been withdrawn.
The idea of producing the necessary units in the necessary quantities at the necessary time is described by the short term Just-in-time. Just-in-time means, for example, that in the process of assembling the parts to build a car, the necessary kind of sub-assemblies of the preceding processes should arrive at the product line at the time needed in the necessary quantities. If Just-in-time is realized in the entire firm, then unnecessary inventories in the factory will be completely eliminated, making stores or warehouses unnecessary. The inventory carrying costs will be diminished, and the ratio of capital turnover will be increased. However, to rely solely on the central planning approach which instructs the production schedules to all processes simultaneously, it is very difficult to realize Just-in-time in all the processes for a product like an automobile, which consists of thousands of parts.
Therefore, in Toyota system, it is necessary to look at the production flow conversely; in other words, the people of a certain process go to the preceding process to withdraw the necessary units in the necessary quantities at the necessary time. Then what the preceding process has to do is produce only enough quantities of units to replace those that have been withdrawn.
