The potential benefits of JIT to an organization and its purchasing function in particular, have been summarized as follows:
- Shorter lead-times
- Shorter time needed to make a product
- Higher equipment capacity and utilization
- Simplified planning and scheduling
- Less paperwork
- Less scrap wastage
- Better morale and participation of workforce
- Better relations with suppliers to ensure that they understand thoroughly the importance of consistently maintaining lead times and a high level of quality
- Emphasis or solving problems in the process
- Part costs- lower scrap costs, lower inventory carrying costs
- Quality- fast detection and correction of unsatisfactory quality and ultimately, higher quality of purchased parts
- Design: fast response to engineering change requirements
- Administrative efficiency- fewer suppliers, minimal expediting and order release work, simplified communications and receiving activities
- Productivity- reduced rework, reduced inspection, reduced parts-related delays
- Capital requirements – reduced inventories of purchased parts, raw materials, work-in progress and finished goods
- Making high quality products with few interruptions by breakdowns, can mean buying better quality
- Inventories of production materials permit suppliers‘ quality deficiencies to be covered, and in-process inventories permit off-spec work in-house to be given less attention than it should. This occurs simply because the unacceptable are reworked. The same rationale applies to schedule slippages caused by inefficiencies in the workplace and in the system itself. The end result, claim JIT proponents, has been a tendency among US managers and their employees to accept mediocre, second-rate work as the norm.
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