Just In Time System Analysis

Just In Time is a principle whereby is used to save more of warehouse space and unnecessary amount of cost-carrying and improve on efficiency of the Toyota Production System. This means that the company will be organising the delivery of the component parts to individual work stations just before they are physically required. Cars can then be built to order and that every component would fit perfectly as they will be no other alternatives. Therefore, it is impossible to hide manufacturing issues and have to be deal with it on the spot.
To ensure that they produce a large number of cars to be sold, more than 30 000 parts are needed to build up a car from scratch. Therefore, Toyota has to make a production plan whereby it includes how parts
Just in time helps to improve the liquidity in the company and is it not tied up to the stocks. Production space would also increase as there is no need to keep to many stocks in the warehouse for so many days and stocks mostly move out within 6 to 7 days from delivered date. It also help Toyota to reduce the amount of wastage, obsolete and damaged stock. There will be lesser need to have multiple amount of suppliers and would also be able to control the supplier flow much easily with lesser conflict. However there are also disadvantages of Just in time system. Many of times these systems are on the basis whereby suppliers are always reliable and dependable which defeats the purpose of having strong relations with the suppliers. Possibility of labour strikes amongst workers in production plants are also not considered in the process which also decreases as to how effective the systems actually work. They also have increased the risk of having stock shortage as only precise amount of goods are given. These systems are also not cheap to build up it requires a lot of funds to set up and reconstruct the
This is commonly seen in the Thailand where the production of the cars are held. Suppliers would come from the multiple Small-Medium Enterprises around the country. This systems allows Toyota and the supplier to agree on long term issues and objectives and increase the effectiveness of the production and also strengthens the supplier’s competitiveness. The progress is regularly evaluate in terms of the organization, effort, and achievement and the assessment is communicated between the supplier and Toyota itself. If suppliers are unable to meet targets that Toyota wished they had, Toyota would provide various expertise to help to analyse and solve the issues faced. This help the supplier to improve their competitiveness and broadening their business opportunities as well as maintaining good relationships with Toyota. This helps Toyota to increase in their efficiency in the parts or materials needed for their production. With closer relationships they will be able to focus more on the production process and have lesser issues in terms of conflict between supplier and the company itself. Also, with most of the suppliers being a Small-Medium Enterprise most of them would be near the production plant of Toyota itself therefore enabling them to have a quicker delivery time and faster manufacturing services. With the combine efforts from both sides, they will be able to overcome multiple problems