Is Just-in-Time Manufacturing Right for Your Business? 72

Is Just-in-Time Manufacturing Right for Your Business?

The following article is a guest post.

History of the JIT System

Also known as the Toyota Production System, just-in-time (JIT) manufacturing is a model of production in which items are created to meet demand. Rather than building up a surplus of an item or preparing orders in advance of when they are needed, manufacturing companies create products as they receive orders.

One of the earliest mentions of the just-in-time concept was by Henry Ford in his book My Life and Work of 1923. He stated materials were to be bought only for immediate needs. His company would purchase enough for the current plans and then any future plans that needed to be completed before more materials could be transported. Ford believed that the system would save money because the amounts that had to be paid out for materials would result in a quick turnover. The method was later adopted by the Ford Motor Company and other various businesses.

Since then, advances in computer systems and automated storage and retrieval systems have allowed this practice to be applied more readily and effectively to a wider array of businesses and industries. Vertical lift modules like those supplied by Vertical Storage USA can allow for the better use of warehouse space for the storage and retrieval of parts and materials along any stage of the production process.

Advantages of JIT Manufacturing

There are a number of cost-saving benefits. When you use just-in-time production, you do not have to hold valuable company money in low-liquidity assets like inventory and materials. Additionally, you do not have to pay for as much warehouse space, and equipment such as vertical lift modules can allow you to more efficiently use the space you have. These benefits free up company money, allowing for reinvestment in the business or an expansion of the bottom-line.

There is a lower risk of damage to goods. When products remain in storage for a long time, it is not uncommon for at least some of the inventory to become damaged. When you do not have products sitting in storage, you reduce the risk that the products will be damaged before they are sold.

JIT manufacturing results in fewer defective products. Making each item individually allows each product to be inspected at each stage in the production process. Errors are spotted more quickly, resulting in faster repairs and fewer defects.

There is a lower risk for product obsoletion. When you have tons of inventory on hand, what do you do with it if it loses popularity? When sales slow and you’re maintaining a large inventory, you may have to sell it at a lower price and accept the loss. JIT manufacturing virtually eliminates this risk. Additionally, companies can quickly and easily shift their focus if the demand for their product changes.

Disadvantages of JIT Manufacturing

The late delivery of materials can significantly impact the production process. Since JIT eliminates reserve products and materials, problems in the supply chain can cause a delay between the completion of current orders and the production of new orders.

The dangers of a natural disaster are more severe. Any company can face setbacks from a natural disaster that occurs in their local area. When you choose a JIT manufacturing system, however, you also put your company at risk of negative effects when natural disasters occur anywhere along the transportation route of your materials since every step of the supply chain could potentially be affected and cause issues with production down the line.

You must invest in more advanced computer systems. In order for the ordering and transportation of materials to go smoothly, it is wise to invest in information technology to link the computer systems between your company and your suppliers. Since the supply chain is so critically important, you need to make sure that your production process is intelligently responding to production orders in real-time, allowing for the routing and tracking of materials and equipment to manufacturing centers as quickly as the orders come in.

Mass orders are more difficult to complete. When you have little to no finished products on hand, large and unexpected orders can throw your entire company out of balance. Unless your production process can scale extremely well or your supply chain is extremely robust, a sudden influx of production orders can spell unforeseen delays.

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5 Ways to Boost Your Business Revenue 43

5 Ways to Boost Your Business Revenue

Every business strives to increase their profit margin to run their operations, expand services and offer more to the customers. But this is easier said than done, especially in today’s environment where competition is stiff.

Businesses don’t foster if they don’t get enough sales and when there aren’t enough sales, the revenue is bound to decline. However, that’s not something which cannot be changed. It takes a few effective strategies and creativity to bring in more sales and boost your business revenue.

Here are 5 ways to boost your business’ revenue:

1. Invest in Online Marketing

A smart move to capture the audience and generate sales is to target people over the internet.

There are more than 3.2 million active users who use the internet, and the number is only growing with more and more people now having access to the web.

These people are your target audience and you only need to reach them to be able to give your business a boost. However, simply spending money to market a business won’t bear much fruit, marketing needs to be done in the right manner.

Social media is a savior that has been providing businesses with the countless advantages they’ve been dreaming about. The best thing about it is that there’s little to no investment when it comes to engaging with customers on social media.

As per statistics, it only takes 5 engagements and creative/informative posts on Twitter and Facebook to do the magic and attract users to your business.

Social media can help bring audience to you, but then it’s up to your services and products to convert them into successful sales and earn good revenue.

2. Automate Processes Where Possible

What is Benchmarking Analysis and How Can It Benefit Your Business

How you manage your business gets to play a very important role in how much money you make or how much money you save.

For example, a business having a manual system of taking orders, keeping track of sales information and maintaining inventory will face time-related issues and increased costs. This can be solved by automating business processes where applicable.

A lot of businesses prefer to use an inventory management software to automate processes. Such tools help to reduce overhead costs, speed up processes, decrease complexity and in the end, increase revenue by speeding up the overall flow of the business.

3. Listen to The Customers

Increasing business revenue requires to look into a lot of things but most importantly, it requires to make the customers content with your products/services.

A lot of businesses make the mistake of not delivering what the buyers need. Hence, they keep on losing customership, get lesser sales and the revenue keeps on dropping.

Nokia is a good example of this. The company did not change with changing times and today is at the bottom.

If you’re a small business looking for ways to grow then it is time to add new products to your arsenal. You can engage with customers by creating polls on your social media profiles and determine what they need.

Mature businesses should also engage with customers to determine if the products they’re offering are enough or do they need to replace a few old ones with new ones.

4. Target Custom Audience

One of the fastest ways to generate revenue is to talk to customers who are interested in your products. SEO can help you find such customers if you optimize the content for a relevant audience.

Hire SEO professionals to target a custom audience so that you can have increased sales and generate more revenue than before.

5. Offer Discounts

There is a large number of people who look for discounts on various products and services.

In fact, about 20% people agree that there is a high chance of them buying a product – even if they do not need it – if the product is offered at discounted rates.