When it comes to producing product, manufacturers have many options for the methodologies they adopt. Just-in-Time (JIT) Manufacturing and Lean Manufacturing are two of the most popular business processes. Although often used as synonyms, they differ significantly.
Let’s take a closer look at each to gain a better understanding of their differences.
Toyota is generally credited with introducing the JIT concept about 50 years ago in response to an initiative to reduce its inventory and lower operating costs.
The JIT methodology evaluates every step in the production process with the goal of lowering costs and reducing lag times.
Rather than keep large amounts of components on hand to have when needed, the company instead placed orders more frequently but in smaller quantities. Ideally, the process flowed so that parts arrived “Just In Time” for use (instead of stockpiling), dramatically lowering the volume of inventory in the pipeline, thereby reducing overall carrying costs.
JIT reduced Toyota’s lead time on orders by one third and its production costs by 50%. But JIT's success didn't end there. Since it's inception, the system proved so successful in other operations that it became a manufacturing staple.
Lean manufacturing casts a wider net and focuses on the customer. Rather than concentrate solely on lowering a supplier’s costs, the emphasis shifts to what the consumer wants, so every step in the process is evaluated in terms of improving the customer experience.
Unlike JIT, lean manufacturing involves individuals that operate outside of the manufacturing process, such as marketing and customer service groups. JIT is also mainly geared toward employees and partners involved in the manufacturing process—those on the floor as well as moving items through the supply chain.
Increasingly, manufacturers are finding that collaborating directly with customers and finding new ways to solicit input about items (like product design) leads to a more mutually beneficial outcome. By 2019, an estimated 50% of manufacturers will be collaborating directly with customers and consumers regarding new and improved product designs through cloud-based crowdsourcing, virtual reality and product virtualization, according to International Data Corp.
Such initiatives are worthwhile: IDC said that corporations taking that step realize up to a 25% improvement in product success rates.
Another difference between the two manufacturing processes is how the they view the production process.
JIT was designed for processes that delivered one specific item with few variations. Therefore, the manufacturing processes and employee skill sets tend to be more rigid.
Lean offers more flexibility, emphasizing the production of larger or smaller amounts depending on fluctuating market needs. Consequently, manufacturing equipment needs to be flexible enough, so companies do not have to invest in specialized devices every time they want to launch a new product.
Also, employees must have a comprehensive view of the organization. Whereas shop floor workers only interact with factory equipment and workers, lean employees collaborate with individuals, marketing managers, and other positions inside and outside the plant walls.
JIT fits with customers that want the lowest price. But in other instances, consumers value other qualities, such as higher durability. With lean manufacturing, a supplier examines its manufacturing processes in search of ways to lengthen the product lifetime. For instance, they select a higher cost, longer-lasting element to make the product and meet those customer expectations.
JIT and lean both fit in today’s emphasis on agility as well as the notion that supply chains and manufacturing processes must be responsive, flexible and dynamic. A major challenge faced by both types of manufacturers is in creating an accurate, real-time picture of where components are in the manufacturing cycle.
With product variety expanding, delivery times shortening, mounting financial pressures and increasing customer demand and expectations mean manufacturers must innovate or risk falling out of the competitive race altogether.
Digital automation (a form of “transformation”) and enterprise mobility technologies with barcoding are two ways manufacturing operations can rise to the challenge in handling and storing large volumes of inventory, raw materials, spare parts, consumables and fixed assets. Trends suggest both technologies may be needed in order for midsize and enterprise-level organizations to remain competitive, scale and grow.
Mobile data collection and manufacturing enablement solutions can help automate outdated paper processes and workflows, integrate existing business applications, create end-to-end material visibility, and empower real-time access via mobile devices and software. The major advantage with digital automation technologies like mobile and automated data collection (ADC) is that it helps drive productivity, efficiency and cost savings without requiring added infrastructure.
Other benefits for manufacturers include:
Manufacturers are constantly trying to improve their business processes. JIT and lean are two management approaches that help organizations evaluate and improve their operations. Regardless of whether JIT or lean manufacturing works best for a business, your company may need to embrace automation on the shop floor and in the warehouse in order to beat out the competition.
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