Links with suppliers key to JIT success
By Kevin R Fitzgerald -- Purchasing, 9/2/1999
For years, some purchasing professionals and supplier representatives have been telling me--adamantly, in many cases--that just-in-time (JIT) materials delivery systems simply don't work. I always point out to the skeptics that other sources have told me that JIT can and does work, and then I'd cite some specific examples. Now I have another to add to the list.Last month Toyota announced that it has developed systems and methods to manufacture a custom-ordered car within five days of receiving the order. DaimlerChrysler says its 10-12 day average currently leads all automakers; General Motors assembles a custom vehicle in 17-18 days.
Toyota officials described a "next-generation just-in-time logistics system" and computer software that allows planners to create a "virtual production line" as key factors in the company's compressed manufacturing cycle time. Parts are delivered to assembly lines 24 times each day, on average, in small lots, by trucks that run fixed routes to several suppliers on each trip.
Of course, Toyota's JIT success was built on a foundation that's not mentioned in general news coverage, but is highlighted in our article that begins on page 40. Transportation Editor Brian Milligan points out what's needed for JIT systems to work--better communication among all links in the supply chain. This may sound obvious, but poor communication or, in many cases, a complete lack of communication have caused the failure of many or even most JIT systems.
Many purchasing pros have had some very bad experiences with JIT, and they're appropriately skeptical of the concept. But, JIT success stories aren't all that hard to find, especially in automotive manufacturing and other original equipment markets. Toyota's announcement illustrates what can be achieved when a manufacturer first makes a serious long-term commitment to JIT principles, then brings suppliers into the processes.
Far too many companies start down the JIT path without a comprehensive plan that includes all affected links of the supply chain, and without clearly communicating goals of the JIT effort and details of how it must be implemented. And communication doesn't mean simply feeding suppliers data. Suppliers should be informed as completely as possible in as many areas as possible, some of which do not at first glance appear to have anything to do with JIT: strategic business planning, minute details of processes and systems that interface with those of the supplier, and short- and long-term sales goals and forecasts. Anything less is likely to kill any chance of the system working correctly before it ever gets off the ground.
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