The document discusses just-in-time (JIT) inventory strategies. It defines JIT as receiving goods only as needed in the production process to reduce inventory costs. JIT consists of JIT purchasing, manufacturing, and distribution. Examples of industries using JIT include fast food restaurants, florists, and computer manufacturers. The benefits of JIT include less space needed for stock, reduced costs, and increased cash flow. Potential disadvantages are risk of lost sales and high supplier dependence.

1. JUST IN TIME INVENTORY
Presented By:-
Bhawan Singh
Devesh Mishra
Deepak Rajak
Gauri Gupta
Gaurav Singh
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2. Just In Time:- An inventory strategy companies employ to increase efficiency and
decrease waste by receiving goods only as they are needed in the production
process, thereby reducing inventory costs.
Inventory - .important assets that most businesses possess
.turnover of inventory is the primary sources of revenue
.generation and subsequent earnings for the company's
shareholders/owners.
Just- In- Time, commonly known as “Toyota Production System”
JIT consists of 3 parts
JIT purchasing JIT manufacturing JIT distribution
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3. Examples of Just-in-Time Inventory
•Gift Basket Drop-Shipping –
•Fast-Food Restaurants- use just-in-time inventory to serve their customers on a daily basis
during breakfast, lunch and dinner.
•Florist - can use a just-in-time inventory system to manager her orders, save time and money.
•Print-on-Demand Publishing - take advantage of just-in-time inventory by working with a
printer that offers print-on-demand services.
•Computer Manufacturers - use just-in-time inventory to control the manufacturing and
ordering of their computer systems.
http://smallbusiness.chron.com/examples-justintime-inventory-11970.html
use the just-in-time inventory system to service their customers.
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4. Type of Inventory:- The function of the inventory, the firm maintain the four type of
Inventory
 Raw material inventory
Work in progress inventory
Finished goods inventory and
 Maintenance/repair/overhauling(MRO) supply.
Classification of Inventory
Cycle Inventory
Safety Inventory
Seasonal Inventory
Pipeline Inventory or Inventory Transit
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5. Inventory within the Supply Chain Network
Supplier Including
Subcontracting and
Direct site
Movement
Production
Stock as material
Work in Progress
Finish goods
Factory/CFA
warehouses
Customers
Distribution
Channel/Retailers
Type of cost Associated with Inventory
 Inventory Holding or Carrying Cost
 Taxes, insurance and shrinkage related costs
 Storage and handling costs
Ordering Cost
Carrying cost
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6. Inventory Models
Inventory models for Independent Demand
Basic economic order quantity(EOQ) model
Production Order quantity model
Quantity discount model
Minimum Inventory=0
Order Quantity = Q (Maximum inventory Level
Usage Rate
Average
Inventor
y on
hand
Inventory
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7. Annual
Cost
Set-up(order)
Cost curve
Holding cost
curve
Optimal order quantity
Min
Total cost
Curve for total cost of holding and setup
Q = Number of piece per order
Q* = Optimal number of piece per order (EOQ)
D = Annual demand in units for the inventory item
d = Daily demand rate, or usage rate
S = Setup or ordering cost for each order
H = Holding and carrying cost per unit per year
t = Length of production run in day
P = Daily production rate
L = Order lead time
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8. How Just-in-time benefits your organisation.
Just-in-time is itself, based on four key principles that work together to support this
unique concept at every level
Heijunka is the . elimination of uneve ness in workload (mura).
. Heijunka also eliminates muri
. Both mura and muri are thought of as types of muda
Waste (muda) is defined as anything that does not add value.
 Takt time – the heartbeat of production
Takt is the rate of customer demand. , determines the flow-rate and enables the
calculation of how much work can be done.
The kanban card is a simple, highly visible device that the Toyota Production System uses
to call-up components as they are required,
Heijunka Elimination of waste Takt time Kanban
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9. Just in time Efforts:- Following are the various JIT efforts
Cellular manufacturing
Multi skilled workforce
Kaizen/continuous improvement
 set-up time reduction
Small-lot sizing
Stable production schedules
Total productive maintenance (TPM)
Total Quality management (TOM)
Vendor development
Kanban
Standard containers
Quality circle
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10. Reason for Just In Time Efforts
Simplifying stable production plan, or minimum variability
 High volume repetitive manufacturing
 Proximity of suppliers
 Rising inventory level
 To gain competitive advantage in the market
Mission of the Just In Time
 Elimination of in transit inventory
 Elimination of in plant inventory
 Elimination of unnecessary activities
 Elimination of redundant
 Reduce inventory
 Reduce lot sizes
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11.  An inventory system designed to
produce efficient output with
minimum lead time at the lowest
possible cost, minimizing waste, with
great consistency.
Objectives:
 Create only want the customer
wants at the rate the customer
needs them.
 Produce at products of consistent
high quality.
 With minimal waste of
labor, material, and equipment.
Process Overview
Take order
Manage
Inventory
Sales
Forecasting
Order
Completed
Served to
the customer
Pull inventory
Prepare order
Just-In-Time Inventory System
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12. Vendor Managed Inventory:- Vendor managed inventory (VMI) can be
define as a
Mechanism where the supplier create the purchase orders based on the demand
information exchanged by the focal firm manufacture, retailer, or customer.
VMI is a backward- replenishment model where the supplier does the demand
Creation and demand fulfilment.
Advantage of Vendor Managed Inventory
Distributer Benefits
Planning and ordering cost will decrease due to the responsibility being shifted to the
Manufacturer.
The overall service level is improved by having the right product at the right time.
The manufacturer is more focused than ever on providing great service.
Manufacturer Benefits
Visibility of the Distributor’s Point of Sale data makes forecasting easier.
Promotions can be more easily incorporated into the inventory plan.
A reduction in Distributor ordering errors
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13. Advantages of JIT
 Less space required for stock
 Closer relationships with suppliers
 Reduced the cost of production
 Less vulnerability to fashion and
technology changes
 Reduction in stockholding costs
 Increase in cash flow
 Reduce the wastage
Disadvantages of JIT
 Danger of lost sales
 High dependence on suppliers
 Less time for quality control on arrival of
materials
 Increased ordering and admin costs
 May lose bulk-buying discounts
 It takes time to established
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14. To increase efficiency, Henry
Ford had components and
raw materials delivered to
his factories just as they
were needed.
Businesses that use just in time
inventory strategies often utilize
intermodal shipping systems.
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