Question- What are the advantages of JIT?

Ans. 

Advantages of JIT

These are as under-

1. Funds that were tied up in inventories can be used elsewhere.

2. Areas previously used to store inventories are used for other more productive uses.

3. Throughout time is reduced, resulting in greater potential output and quicker response to customers.

4. Defect rates are reduced, resulting in less waste and greater customer satisfaction.

5. The JIT model eliminates overordering and excess of all kinds.

6. Low inventory levels significantly reduce the risk of inventory going unsold and sitting in the warehouse obsolete.

7. Defective inventory items are easier to identify.

8. JIT eliminates the costs that come with extra raw materials, unneeded inventory and product storage.

9. Greater efficiency brings higher inventory turnover.

10. A flexible workforce can focus on making quality products with lower defect rates. Better outcomes increase customer satisfaction and reduce the cash outlay for production.

11. Fewer items moving on the shop floor allows teams to focus on building high-quality products.

12. Since minimal inventory is on hand, storage-related accidents decline.

13. Suppliers guarantee quality in advance. So, deliveries go straight to production areas instead of being held in receiving to await inspection.

14. JIT shortens manufacturing time, which decreases lead times for customers.

15. The high inventory turnover rate keeps items from sitting in your facility for too long and becoming obsolete.

16. Receiving deliveries in the smallest possible quantities sometimes multiple times per day - virtually eliminates raw material inventories.

17. When suppliers are located near a company's production facility, the shortened distances contribute to timely deliveries. On-time, reliable delivery of goods reduces the need for safety stock.

18. Receiving goods on an as-needed basis reduces inventory costs.

19. The low inventory levels that come with JIT limit the amount of working capital needed.

20. Inventory holding costs (like those for warehousing) are minimal because less space is used.

21. Companies invest less cash in inventory because JIT doesn't require having a lot of stock on hand.

22. Labour expenses are lower since the number of person-hours required to fulfill orders is usually fewer than full-time production.

23. Having less raw material stock to draw down before product changes makes it easier to implement engineering change orders to existing products.

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