JIT SYSTEM: CONCEPTS, BENEFITS AND MOTIVATION IN INDIAN INDUSTRIES

Abstract

Just-in Time system has been defined and identified worldwide by many researchers and practitioners for world class manufacturing. This system has been accepted as a systematic approach to achieve competitiveness and excellence in manufacturing by many researchers and practioners in many countries in last three decades. This system has potential to compete in the present scenario of rapid development and growth of industrialization. This paper presents the spread of JIT movement, concepts, objectives, elements, benefits, implementation and motivation of JIT system. The new technologies have far reaching implications for the competitive advantages of countries in the international competition of global markets. Developing countries cannot remain just silent spectators while this new industrial revolution sweeps the industrialized world. The most fortunate thing about the new industrial revolution is that skilled people and not much by heavy machinery largely dominate it. Modern technology is more oriented towards system configuration than the development of hard and robust machines. With the development of fast communication, rapid transportation and super computers, manufacturing is no longer restricted today at local level, but has become global in character. A manufacturing company has to become competitive for its survival; it has to supply products of consistent high quality at reliable and reduced delivery time. Market also demands more product variants that mean reduced lot size and high flexibility in operations. Manpower cost has also risen. All these factors tend to increase the product cost. But the industry has to maintain the cost at a reasonable level. The JIT system is based on a philosophy of eliminating waste and utilizing the full capability of each worker to gain maximum benefit traditionally, purchasing departments have been given the task of negotiating for the lowest prices possible in an effort to reduce costs and increase company profits. These conventional relationships with suppliers were adversarial. Today's competitive marketplace calls for an updated strategy for the function. JIT (Just-in-Time) is one such approach to become a world-class competitor for world-class manufacturing. During the last two decades, the purchasing environment has become one of the most crucial elements in establishing the value added contents for the products and services and hence has become the vital organization in the dynamic international market (1). Shortages of raw material, shorter lead time, high quality, increasing the variety of products with smaller runs, inflation, productivity and introduction of a JIT purchasing system etc. has prompted the realization of the importance of purchasing. The traditional approach to purchasing is at the root of many of the problems, business faces today. High inventory levels, soaring costs, adverse relationships with suppliers and quality issues which either stop production or results in poor products are just a few of the problems with the current way of purchasing (2). JIT purchasing functions often conflict with traditional practices of purchasing, which is characterized by competitive buyer-supplier relations with minimum communication and infrequent deliveries. The buyer carries large inventory (27, 58) to compensate for long lead-times and poor quality of incoming parts. In contrast a fundamental element of JIT purchasing is cooperative and long- term (47) buyer-supplier relationship. In addition to price the supplier selection is based on quality, technical expertise, and effective buyer-supplier communication, which result in frequent and reliable deliveries, high quality of incoming parts, small shipment size and parts delivered in exact quantity. As a result JIT purchasing helps to reduce inventory and increased productivity, benefiting both the buyer and supplier (36, 38, 40, 53, 54, 59). II. The Spread Of Jit Movement