Variability in the Context of JIT Systems - Essay Example

For example, “the 'extra' inventory is then used to cover variations or problems. Effective inventory tactics require 'just in time', not 'just in case'. JIT inventory is the minimum inventory necessary to keep a perfect system running.

With JIT inventory, the exact amount of goods arrive at the moment it is needed, not a minute before or a minute after.” (Chapter 16, p.495) One way in which JIT can help remove variability is by “eliminating inventory that hides variability in the production system”. A suitable analogy to illustrate this point is a lake full of rocks. “The water in the lake represents inventory flow, and the rocks represent problems such as late deliveries, machine breakdowns, and poor personnel performance.

The water level in the lake hides variability and problems. Because inventory hides problems, they are hard to find”. (Chapter 16, p.495) JIT can help reduce variability here by reducing unwanted inventory. The top management can significantly reduce variability by adopting JIT practices. By reducing inventory, the metaphorical 'rocks' in the system (which stand for variability and other problems currently hidden from view) come into full view. It is then much easier for the management to work on these exposed problem areas and clear up the lake.

This procedure could be refined and iterated once again, by making additional cuts in inventory and further reduction in problems. Singer Shingo, the renowned co-founder of the Toyota JIT stem goes as far as to say 'Inventory is Evil'. While there is a bit of exaggeration in this motto, it is not outlandish either. In essence, by hiding chronic problems in the production system, inventory contributes greatly to variability. Conversely, by reducing inventory by applying JIT systems, the variability, and associated costs and encumbrances are greatly reduced.

Reducing variability is only one benefit of JIT systems. JITs have the potential to benefit several areas of a company's operations. Starting from the layout of the office/plant environment to optimizing the scheduling of the production process, the scope of JIT is quite broad indeed.