Just-In-Time (JIT) Production

Now before you all go full on hate, hear me out on this one. This post was inspired by a post made by Serge Huybrechts here https://lnkd.in/g4EkY-rh? #Kanban was developed by #Toyota as a way to reduce inventory and non-value-adding work (waste, also known as muda). It was born out of necessity due to financial conditions at the time, and is the manifestation of Just-in-Time (JiT) as envisaged by its creator, Kiichiro Toyoda. It works (simple version) by using a signaling system (kanban cards) to request a supply of inventory (stock or parts) or work (people to make things). As the demand from the customer (where the work starts) is received, the kanban system ensures we only create or consume only what is needed to fulfill the customer demand. It levels the system by reducing utilization, only consuming the absolute necessary resources to create value. Unfortunately, in most companies, work is pushed by executives and managers that creates demand, not always related to the customer. This is often their own ideas of value, and mainly driven by a way to make money (reality check here folks). These same executives and managers want their stuff ASAP, and want the utilization of resources (mainly people) to be maximized. The kanban methods that have spawned since David Anderson first wrote his book on kanban have become a resource maximizing approach. I have had these methods demonstrated to me using software that is used to train practitioners. It ostensively allocates work to people or teams to maximize output of those resources removing slack in the system, irrespective of the initial “pull” from the customer. Toyota kanban and the kanban methods of others are not the same thing. Most are ANDON (visualization), whereas Toyota’s system is design for minimizing utilization aka Just-in-Tme. Kanban simply translates to “signboard” or “billboard” the word is used effectively in both approaches, but in my view the latter was more about coopting a well known term for a just in time system, as opposed to describing a visual control approach. Name association sells. I can’t knock David for doing that. I wish I’d thought of it. Both systems are a form of visual control. The Toyota system to minimize consumption of resources, and the other versions that maximize utilization of people. They both make this visible. One is a signaling pull system, the other a status reporting system. The key here is to understand your system and how it is configured to work. It could be a blend of them both of course. I am not arguing the merits of push vs pull here, just highlighting the reality of the different approaches. One is developed to reduce consumption in a standardized repeatable process (standard work), and the other is a system for visualization and allocation, maximizing utilization. #lean #agile #scrum #flow #flowsystem #complexity #cynefin #management #leadership #innovation

Aligning Production with Customer Needs: A Look at "Establish Pull" Principle Lean suggests prioritizing a streamlined, customer-centric approach to production or services. Hence, "Establish Pull" is the next core principle within this philosophy I want to discuss. It focuses on aligning production with actual customer demand. What does "Establish Pull" mean? In simpler terms, it means prioritizing production/services based on what customers are actively buying, rather than relying on forecasts or producing large quantities in anticipation of future sales. Benefits of "Establish Pull" approach: - Reduced Waste: By producing (or providing services of) only what's currently in demand, organizations can significantly reduce the risk of overproduction and excess inventory. - Increased Efficiency: Optimizing production based on actual demand allows for a more efficient allocation of resources. - Improved Customer Satisfaction: Aligning production with customer needs ensures organizations can meet customer expectations and deliver desired products in a timely manner. Practical suggestions for Implementing "Establish Pull": 1) VISULAL TOOLS indicating when production must start (Kanban System): use visual indicators for tracking inventory levels and triggering production only when replenishment becomes necessary based on real-time demand. 2) STREAMLINED PROCESSES: optimize production processes by identifying and eliminating bottlenecks. This allows for faster lead times and enables a quicker response to customer needs. 3) EFFECTIVE COMMUNICATION: establish efficient communication channels between different functions. This ensures all departments are aligned with current customer demand and production can be adjusted accordingly. 4) FORECASTING WITH CAUTION: while forecasting can be helpful for planning, it shouldn't dictate production decisions. Focus on real-time customer demand data for more accurate production triggers. "Establish Pull" fosters a just-in-time approach to production/services. This ensures optimal resource usage and agile response to market needs. Eventually it leads to customer satisfaction, what is top priority for Lean organizations. #LeanManufacturing #DemandDriven #CustomerCentric #ContinuousImprovement #JustInTime #OperationalExcellence #ReducedWaste #IncreasedEfficiency #CustomerSatisfaction 

Inventory management plays a crucial role in optimizing supply chain operations and ensuring business continuity. Whether you're in #Manufacturing, #Logistics, or #OperationsManagement, selecting the right inventory strategy can streamline processes, reduce costs, and enhance resilience. 🔹 Just-in-Time (JIT): A Lean Approach for Maximum Efficiency JIT is widely used in #SupplyChain and #Technology-driven businesses where efficiency is key. By reducing excess stock, JIT helps: • Lower storage costs and free up capital • Minimize waste and obsolete inventory • Improve process efficiency with real-time demand management However, JIT requires strong supplier relationships and robust #Innovation in planning tools. Disruptions in #Logistics or raw material supply can cause production halts, making it risky in unpredictable markets. 🔹 Just-in-Case (JIC): A Safety Buffer for Uncertain Times JIC, on the other hand, focuses on risk management by keeping extra stock to handle unexpected supply chain disruptions. This strategy is valuable in #Business and #Entrepreneurship, where unpredictable market conditions demand flexibility. JIC helps: • Mitigate risks from supplier delays • Ensure production continuity during demand surges • Offer greater control over supply chain volatility While JIC offers stability, it increases holding costs and may lead to inefficiencies in #OperationsManagement if not managed strategically. 💡 Which Model Works Best? • If efficiency, cost-cutting, and streamlined operations are priorities, JIT can drive #Management excellence. • If your business faces high market fluctuations or unreliable suppliers, JIC provides an added layer of security and resilience. 🚀 The Future Lies in a Hybrid Approach! Many #Leadership teams are integrating #Technology-driven solutions such as AI-powered forecasting and automation to balance JIT and JIC, ensuring supply chain agility without compromising efficiency. 𝑫𝒊𝒔𝒄𝒍𝒂𝒊𝒎𝒆𝒓: 𝘐 𝘩𝘢𝘷𝘦 𝘵𝘳𝘪𝘦𝘥 𝘵𝘰 𝘦𝘯𝘴𝘶𝘳𝘦 𝘢𝘤𝘤𝘶𝘳𝘢𝘤𝘺 𝘣𝘶𝘵 𝘮𝘪𝘴𝘵𝘢𝘬𝘦𝘴 𝘮𝘢𝘺 𝘰𝘤𝘤𝘶𝘳. 𝘐 𝘸𝘪𝘭𝘭 𝘣𝘦 𝘩𝘢𝘱𝘱𝘺 𝘵𝘰 𝘤𝘰𝘳𝘳𝘦𝘤𝘵 𝘢𝘯𝘺 𝘦𝘳𝘳𝘰𝘳𝘴 𝘰𝘳 𝘰𝘮𝘪𝘴𝘴𝘪𝘰𝘯𝘴 𝘶𝘱𝘰𝘯 𝘯𝘰𝘵𝘪𝘧𝘪𝘤𝘢𝘵𝘪𝘰𝘯. 👉 How does your company manage inventory? Drop your insights in the comments!

Just In Time (JIT) vs. Just In Case (JIC) in Inventory Management: Choosing the Right Strategy In today’s fast-paced business world, managing inventory efficiently is crucial for maintaining a competitive edge. Two popular inventory management strategies—Just In Time (JIT) and Just In Case (JIC)—serve different needs and come with their own pros and cons. Understanding when and how to implement these approaches can make or break your supply chain efficiency. 1️⃣ Just In Time (JIT) JIT focuses on reducing inventory levels to a minimum, with goods delivered as they are needed in the production process. This strategy relies heavily on efficient forecasting, strong supplier relationships, and agile production systems. It is a lean approach that reduces storage costs and minimizes waste. Benefits • Lower inventory costs • Reduced waste • Faster turnover However, JIT can be risky during supply chain disruptions. Without a buffer stock, any delay in delivery or an unexpected spike in demand could cause production delays. 2️⃣ Just In Case (JIC) In contrast, JIC focuses on maintaining a larger inventory buffer to avoid stock-outs. It is a more conservative approach, with extra inventory kept as a safeguard against demand fluctuations or disruptions in the supply chain. Benefits • Security during uncertainty • Flexibility • Stable operations But JIC also comes with drawbacks, such as higher inventory holding costs and potential waste if products are not used before their shelf life expires. Which Strategy is Right for You? The choice between JIT and JIC depends on several factors: 1️⃣ Industry and Market Conditions High-demand industries (like electronics) may benefit more from JIT, while industries with unpredictable supply chains (like healthcare or food) might lean toward JIC. 2️⃣ Supply Chain Reliability If your suppliers are highly reliable and your production schedules are predictable, JIT could work well. If your supply chain is prone to disruptions, JIC might offer the necessary security. 3️⃣ Customer Expectations For businesses where fast delivery is key (e.g., e-commerce), JIT can be beneficial. However, for industries that require guaranteed availability, JIC provides a more robust solution. 4️⃣ Cost Considerations JIT can lower holding costs but requires high levels of coordination. JIC can increase inventory costs but provides more safety and flexibility. Conclusion There is no one-size-fits-all solution. Many businesses find that a hybrid approach, combining elements of both JIT and JIC, offers the best balance of efficiency and risk management. By understanding your unique business needs, you can make an informed decision that drives profitability and operational excellence. #SupplyChain #Logistics #InventoryManagement #JIT #JIC #BusinessStrategy