10.1: Just in Time (JIT) and Just in Case (JIC)

10.1 
Just in Time and Just in Case
Essential idea: Just in time and just in case are opposing production strategies utilised by the manufacturer.

Just in Time (JIT)
A situation where a company does not allocate space to the storage of components or completed items, but instead orders or manufactures them when required. Large storage areas are not needed and items that are not ordered are not made.

Advantages

1. Production to order with materials being supplied JIT cuts down on storage space
2. Reduced capital investment as capital is not tied up in unused raw materials or unsold products
3. Reduced work in progress
4. Increased efficiency
5. Improved stock control
6. Saves money - no need for storage costs

Disadvantages

1. If any of the stock is faulty then more has to be ordered from a supplier which could slow down the lead time and production processes
2. Companies may not benefit for economies of scale if they are purchasing smaller qualities.

Example:

Dell's Just in Time Manufacturing system

Just-in-time (JIT) manufacturing is specific type of inventory production strategy that is used to improve a company’s return on investment through a cutback of stock held. Dell, a computer oriented firm, has integrated JIT which cuts on their need for stock management.

Just in Case (JIC)
Just in Case manufacturing is the traditional model of production, in which products are created in advance and in excess of demand. According to the principles of lean production, the JIC model wastes resources because inventories must be maintained. The JIT model of manufacturing was developed to eliminate the wastefulness of the traditional model.

Advantages

1. Every customer becomes a sale (they can buy it straightaway)
2. The manufacturer has a 'buffer' of goods in stock in case of unforeseen circumstances
3. The manufacturer can respond quickly to a demand for a product
4. The manufacturer can produce a steady flow of product and have a stable workforce
5. Less capital costs than JIT - information and communication technology systems , stock control systems
6. Able to stock pile supplies or finished products.

Disadvantages

1. Shop owners have to hold a lot of inventory
2. A large investment at the start of the business
3. It occupies a lot of space, which can be expensive
4. These products might spol leading to waste
5. If trends change, you could be left with a lot of unsellable products