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Strategic Management Accounting

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Real-Life Examples of Successful JIT Systems written by: Jack Wilson • edited by: Michele McDonough • updated: 6/29/2013
JIT manufacturing is a powerful and proven system of producing products efficiently while keeping costs low. Some of the most successful companies in the world have used this philosophy to improve their manufacturing processes and better meet customer demand.

Just in Time Manufacturing
Just in Time Manufacturing (JIT) refers to a system of manufacturing in which products are not built until the product is ordered and paid for. Some companies that have successfully implemented JIT include Toyota, Dell and Harley Davidson.

Toyota

Toyota is considered by many to be the poster child for JIT success. The Toyota production strategy is highlighted by the fact that raw materials are not brought to the production floor until an order is received and this product is ready to be built. No parts are allowed at a node unless they are required for the next node, or they are part of an assembly for the next node. This philosophy has allowed Toyota to keep a minimum amount of inventory which means lower costs. This also means that Toyota can adapt quickly to changes in demand without having to worry about disposing of expensive inventory.

Important Factors to Toyota Success:

Small amounts of raw material inventory must be kept at each node in production, so that production can take place for any product. These parts are then replenished when they are used.
Accuracy of forecasting is important so the correct amount of raw materials can be stocked.
Dell

Dell has also leveraged JIT principles to make its manufacturing process a success. Dell’s approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers, by…...

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