Jit in Purchasing

JIT Purchasing
JIT Concept
The concept of Just In Time is designed to manage the flow of materials, components, tools and associated information in other to elimination of all waste in the system, achieve continuous improvement and improve bottom line. A company running the JIT philosophy can improve profits and return on investment by reducing inventory levels, reducing variability in the system, improving product quality, reducing production and delivery times and reducing set up costs. This conceptual framework for JIT looks to eliminate waste by reducing the amount of inventory carried, although the main aim of JIT is to eliminate inventory but in reality it’s impossible to completely eliminate inventory, it also focuses on increasing flexibility, smoothing the flow on the production floor and pursuing continuous improvement. The figure below shows the JIT conceptual Framework.
Eliminate Waste
Increase Flexibility
  * Flexible resources
  * Cellular layouts
Smooth the Flow
  * Pull system
  * Kanbans
  * Small lots
  * Quick setups
  * Uniform production
Continuously Improve
  * Quality at the source
  * Total productive maintenance
  * Supplier networks

JIT Conceptual framework

JIT Purchasing
Although JIT is traditionally used in manufacturing plants but since the cost of raw materials has traditionally been a serious concern for top management, it is important to look at the purchasing function which is heavily involved in liaising with the suppliers so that the material flows are possible in the manufacturing plant.
It has been well documented that the implementation of just-in-time (JIT) purchasing systems can result, on average, in reduced inventory costs, shorter lead times, and improved productivity for buying organizations. JIT manufacturing consists of Japanese Kanban production techniques, such as reduced manufacturing lot sizes, reduced manufacturing lead times, and enhanced quality assurance programs,...