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.
JIT consists of 3 parts
Just- In- Time, commonly known as Toyota Production
System
JIT purchasing
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JIT manufacturing
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JIT distribution
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Examples of Just-in-Time Inventory
use the just-in-time inventory system to service their custom
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.
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Computer Manufacturers - use just-in-time inventory to control the
manufacturing and
ordering of their computer systems.
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of Inventory:-
The function of the inventory, the firm maintain the f
ry
material inventory
n progress inventory
ed goods inventory and
enance/repair/overhauling(MRO) supply.
fication of Inventory
Inventory
y Inventory
nal Inventory
ne Inventory or Inventory Transit
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Type of cost Associated with
Inventory
Inventory Holding or Carrying Cost
Taxes, insurance and shrinkage
related costs
Storage and handling costs
Ordering Cost
Inventory within the
Carrying cost
Supply Chain
Network
Supplier
Including
Subcontracting
and
Direct site
Movement
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Production
Stock as
material
Work in
Progress
Finish goods
Custom
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ers
Factory/CF
A
warehouses
Distribution
Channel/Retailers 1
Inventory Models
Inventory models for Independent Demand
Basic economic order quantity(EOQ) model
Production Order quantity model
Quantity discount model
Order Quantity = Q (Maximum inventory Level
Usage Rate
Avera
ge
Invent
ory on
hand
Invent
ory
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Minimum Inventory=0
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Curve for total cost of holding and setup
Min
Total cost
Annu
al
Cost
Optimal order quantity
Q = Number of piece per order
Q* = Optimal number of piece per order (EOQ)
D = Annual demand in units for the inventory item
d = Daily demand rate, or usage rate
S = Setup or ordering cost for each order
H = Holding and carrying cost per unit per year
t = Length of production run in day
P = Daily production rate
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L = Order lead time
Holding cost
curve
Set-up(order)
Cost curve
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
Elimination of waste
Heijunka is the
Takt time
Kanban
. 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 flowrate 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
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to call-up components as they are required,
in time Efforts:-
Following are the various JIT efforts
lar manufacturing
skilled workforce
en/continuous improvement
up time reduction
l-lot sizing
le production schedules
productive maintenance (TPM)
Quality management (TOM)
or development
an
dard containers
ty circle
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ason for Just In Time Efforts
mplifying stable production plan, or minimum variability
High volume repetitive manufacturing
roximity of suppliers
ising inventory level
o gain competitive advantage in the market
ssion of the Just In Time
limination of in transit inventory
limination of in plant inventory
limination of unnecessary activities
limination of redundant
educe inventory
educe lot sizes
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st-In-Time Inventory System
Process Overview
An
inventory
system
designed
to
produce
efficient
output
with
minimum lead time at the
lowest
possible
cost,
minimizing
waste,
with
great consistency.
Take
order
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.
Pull
inventory
Prepare
order
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Manag
e
Invent
ory
Sales
Forecast
ing
Order
Complete
d
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Served to
the
customer
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 Benefits
Planning 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
Benefits
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Visibility of the Distributors Point of Sale data makes forecasting
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
Disadvantages
Increase in cash flow
of JIT
Danger
of lost
sales
Reduce
the
wastage
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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