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JUST IN TIME PROCESS

JUST IN TIME PROCESS

Just-in-time manufacturing was a concept introduced to the United States by the Ford motor company. It works on a demand-pull basis, contrary to hitherto used techniques, which worked on a production-push basis.

To elaborate further, under just-in-time manufacturing, actual orders dictate what should be manufactured, so that the exact quantity is produced at the exact time that is required.

Just-in-time production requires intricate planning in terms of procurement policies and the manufacturing process if its implementation is to be a success.

MERITS

  • Just-in-time manufacturing eliminates waste, as out-of-date or expired products; do not enter into this equation at all.
  • Due to the aforementioned low level of stocks held, the organizations return on investment (referred to as ROI, in management parlance) would generally be high.
  • Just-in-time manufacturing encourages the ‘right first time’ concept, so that inspection costs and cost of rework is minimized.
  • High quality products and greater efficiency can be derived from following a just-in-time production system.
  • Close relationships are fostered along the production chain under a just-in-time manufacturing system.
  • Constant communication with the customer results in high customer satisfaction.

DEMERITS

  • Just-in-time manufacturing provides zero tolerance for mistakes, as it makes re-working very difficult in practice, as inventory is kept to a bare minimum.
  • There is a high reliance on suppliers, whose performance is generally outside the purview of the manufacturer.
  • Due to there being no buffers for delays, production downtime and line idling can occur which would bear a detrimental effect on finances and on the equilibrium of the production process.
  • The organization would not be able to meet an unexpected increase in orders due to the fact that there are no excess finish goods.
  • Transaction costs would be relatively high as frequent transactions would be made.

PRECAUTIONS

  • Building a close, trusting relationship with reputed and time-tested suppliers will minimize unexpected delays in the receipt of inventory.
  • Just-in-time manufacturing cannot be adopted overnight. It requires commitment in terms of time and adjustments to corporate culture would be required.
  • Management buy-in and support at all levels of the organization are required; if a just-in-time manufacturing system is to be successfully adopted.
  • Preventive maintenance should be carried out, so as to minimize machine breakdowns.
  • Quality enhancement programs should be adopted, so that total quality control practices can be adopted.
  • Reduction in lead times and frequent deliveries should be incorporated.

CONCLUSION

It is an optimal system that reduces inventory whilst being increasingly responsive to customer needs, this is not to say that it is not without its pitfalls.

However, these disadvantages can be overcome with a little forethought and a lot of commitment at all levels of the organization.

JUST IN TIME PROCESS

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JUST IN TIME PROCESS

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