Question

F. Consider an automobile company that follows JI"T practice. Write one process step of this automobile manufacturing company and explain in detail how JIT can reduce variability in its inventory levels. 4

Answer 1

Toyota Motors is widely known to produce cars using Just InnTIme Manufacturing - JIT.

The organisation adopts following procedures to determine JIT Manufacturing :

1. Workers keep checking and maintain spare parts to achieve zero defects
2. Manufacturing is done in small batch sizes to minimize wastages
3. Sourcing is done from single supplier and collaborative manufacturing takes place with suppliers

These steps help eliminate wasrages as well as continuous improvement as and when required. The cost of storage of inventory and opportunity cost of producing new vehicles is saved. Also manpower is utilisation in effective distributed manner and helps inventory control at optimum level and flexibility is achieved depending on demands.