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Just in Time Analysis of Any Two Companies'

This document discusses just-in-time (JIT) inventory systems and their implementation by Toyota and McDonald's. It outlines the key elements and advantages of JIT, including minimizing inventory, eliminating waste, and improving quality and customer service. The document also notes some disadvantages of JIT, such as having no tolerance for mistakes and relying heavily on suppliers.

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Isha Natu
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59 views16 pages

Just in Time Analysis of Any Two Companies'

This document discusses just-in-time (JIT) inventory systems and their implementation by Toyota and McDonald's. It outlines the key elements and advantages of JIT, including minimizing inventory, eliminating waste, and improving quality and customer service. The document also notes some disadvantages of JIT, such as having no tolerance for mistakes and relying heavily on suppliers.

Uploaded by

Isha Natu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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‘Just in Time Analysis of Any Two

Companies’
Guided By: Presented By:
Dr. Minal Uprety Isha Natu
Rudhi Mahadik
Sakshi Mishra
Srishti Baisya
Just in Time
 The just-in-time (JIT) inventory system is a
management strategy that minimizes
inventory and increases efficiency.

 It is also known as the Toyota Production


System (TPS) as Toyota first adopted the
system in the 1970s.

 Kanban is a scheduling system often used in conjunction with JIT to avoid


overcapacity of work in process.

 The success of the JIT production process relies on steady production, high-
quality workmanship, no machine breakdowns, and reliable suppliers.
 Continuous Improvement:
Elements involved I. Attacking fundamental problems

in JIT II. Devising systems to identify


production and allied problems.
III. Simplicity
IV. The Product
V. Quality control

 Eliminating Waste:  Following are


the types of waste:
I. Waste from product defects.
II. Waste of time.
III. Transportation waste.
IV. Inventory waste.
V. Waste from overproduction.
VI. Processing waste.
 Toyota is a Japanese automobile manufacturer headquartered in Aichi, Japan.

 In November 2014, it became the 12th largest company in the world by revenue.

 Toyota was the world's first automobile manufacturer to produce more than 10
million vehicles per year.

 It became the largest listed company in Japan by market capitalisation and by


revenue.
Working of Toyota J.I.T.
 Using JIT, Toyota produces its vehicles based on the orders it receives through its
dealers.

 In this production process, the company uses its supply chain in such a manner that
only the parts that are needed to manufacture vehicles are received on time.

 Thus, the manufacturing and transportation of parts take place simultaneously. This
allows Toyota to minimize its inventory of vehicle parts.

 JIT also emphasizes the importance of work efficiency. Individual cars are built to
order and that every component has to fit perfectly first time because there are no
alternatives available.

 TPS has become very popular globally. It is also used by companies such as Hewlett-
Packard, Motorola and General Electric.
Toyota Production System: Using Just in Time
 World's leading food service retailer.

 World's second largest private employer (BBC, 2012).

 Founded in 1940 by Richard and Maurice McDonald.

 Around 36,615 restaurants in over 119 countries.

 Serving 68 million customers daily.

 JIT is required because high holding costs, time and wastage problems.
Implementation of McDonald’s J.I.T.
 Improve Quality: The burgers are prepared freshly and hence the quality has
improved.

 Customer Service: As the burger is made only after the order is placed making
special orders is not an issue.

 Cost Reduction: Significant reduction in wastage as uncooked material has the


highest shelf life.

 Reduction in Waiting: Customers waiting time reduced from 11 minutes to just one
and half minutes.
McDonald’s Supply Chain Integration: Using Just in Time
Advantages of Just in Time

 Just-in-time approach keeps stock holding costs to a


minimum level.

 The just-in-time approach helps to eliminate waste.

 Only essential stocks which are required for to


manufacturing are obtained, thus less working capital
is required.

 As this approach works on a demand-pull basis, all


goods produced would be sold, and thus it includes
changes in demand.
Continuation…
 JIT emphasizes the ‘right-first-time’ concept, so that
rework costs and the cost of inspection is minimized.

 By following JIT greater efficiency and high-quality


products can be derived.

 Better relationships are fostered along the production


chain under a JIT system.

 Higher customer satisfaction due to continuous


communication with the customer.

 Just In Time adoption result in the elimination of


overproduction.
Disadvantages of Just in Time

 JIT approach states ZERO tolerance for mistakes,


making re-work difficult in practice.

 A successful application of JIT requires a high


reliance on suppliers.

 Due to no buffers in JIT, production line idling and


downtime can occur which would have an
unfavorable effect on the production process and
also on the finances.
Continuation…

 Chances are quite high of not meeting an


unexpected increase in orders as there will be no
excess inventory of finished goods.

 Transaction costs would be comparatively high


depending upon the frequency of transactions.

 JIT may have certain negative effects on the


environment due to the frequent deliveries.
 Just-in-Time method is a philosophy, which believes that waste can be eliminated by
cutting unnecessary inventory and removing non value-added activities in operations.

 The goals are to produce goods and services as specifications and continuous
improvement through value additions.
References
• https://hbr.org/1989/09/getting-control-of-just-in-time
• https://prezi.com/aoywimnnbfs_/jit-in-mcdonald
• https://cleartax.in/s/just-in-time-jit-inventory-management
• https://www.slideshare.net/mobile/rushin202003/jit-in-toyota-presentation
• https://www.brighthubpm.com/monitoring-projects/72086-toyota-and-jit-
manufacturing/
• http://opepiimraipur.blogspot.com/2011/06/mc-donalds-fast-food-restaura
nt-jit.html?m=1
Continuation…

 Chances are quite high of not meeting an


unexpected increase in orders as there will be no
excess inventory of finished goods.

 Transaction costs would be comparatively high


depending upon the frequency of transactions.

 JIT may have certain negative effects on the


environment due to the frequent deliveries.

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