A way to ensure that the transportation company provides its best effort is by establishing long term relationship with the company. Internal factors that can cause variability in the JIT system include employees, machines, and inaccurate specifications. The JIT inventory system is used by accountants as a measure to lower inventory costs in order to increase profitability. Too much inventory hurts the liquidity of an enterprise.
The company that made famous the JIT inventory system when it began to use it as a tool to improve the productivity of the company is Toyota Corporation. Toyota realized that in the auto industry the nature of the business implied that there were many different types of inventories. There are many parts in the auto assembly process. All cars are made up of hundreds of different parts. The JIT system at Toyota allowed the company to saved money by reducing the amount of inventory in the company’s warehouses. After Toyota introduced JIT in the 1970’s many companies followed suit and implemented the system. JIT inventory can be applied to any business industry, but it has greater applications in the manufacturing sector. The JIT system was adaptive at Toyota allowing the company to adjust inventory levels based on the size of the production batches. To take further advantage of the JIT inventory model Toyota designed car models with compatible