JIT (kanban)

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What it does:
Minimizes production costs and inventories in manufacturing companies; also offers strategies that can improve efficiency in some non-manufacturing companies.

Its other names:
Just in Time, On-Demand Manufacturing, kanban.

Where it comes from:
In the years following World War II, Toyota and other Japanese automakers studied production methods at Ford and other U.S. automakers, hoping to reduce assembly-line downtime and reduce costs. Toyota improved on Ford's production systems and developed what has come to be known as kanban in Japanese, or Just In Time in English.

Summary:
An ideal JIT manufacturing company would function with the precision of a Swiss watch:

- Raw materials and components from suppliers would arrive at the moment they were needed in manufacturing. The need to warehouse them would be eliminated.
- Those raw materials and components would arrive precisely where they were needed on the production line just in time to be incorporated into products.
- Completed products would be shipped out to distributors and customers just in time to fill orders; there would be no inventory.
Of course, the likelihood of implementing such a perfect JIT enterprise is slim, due to the realities of doing business. Companies can however strive toward this goal and continue to become more efficient along the way.

JIT also embodies a philosophy of great efficiency that is expressed in this definition of JIT from the Inventory Control Society (APICS).

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