JUST-IN-TIME PRODUCTION

Reading: Read the text below, and insert the eight words defined in Ib in the spaces.

capacity

component

inventory

lead times

location

outsourcing

plants

subcontractor

Manufacturing companies are faced with a ‘make-or-buy decision’ for every item or (1) ……… they use (as well as for every process and service). Do they make it themselves or do they outsource, and buy from a (2) ……. ? If a company assembles products supplied by a large number of subcontractors, they face the problem of how much (3) ….. they require.

In Just-in-Time (JIT) production - also called lean production, stockless production, and continuous flow manufacture - nothing is bought or produced until it is needed. Each section of the production process makes the necessary quantity of the necessary units at the necessary time - which is when it is required by the next stage of the manufacturing process, or by distributors or customers.

The JIT system is usually credited to Taiichi Ohno, who was vice-president for manufacturing with Toyota in Japan in the early 1950s - although he stated that he got the idea from American supermarkets! JIT is wholly contrary to the European and American logic of encouraging greater productivity, and welcoming production that exceeds the agreed schedule or quota, and stocking extras in case of future problems.

JIT minimizes the cost of holding inventories, which are regarded negatively, as avoidable costs, rather than as assets. The large Japanese manufacturing companies have long practised (4) ….. , and generally use extensive networks of small subcontractors. Of course, if a single subcontractor fails to deliver a component on time, the whole production process is sabotaged, but the Japanese industrial system relies on mutual trust and long-term relationships. Small suppliers often attempt to situate their facilities close to the (5) ….. of a larger company with which they work.

The Japanese also prefer small, specialized production (6) …… with a limited (7) ….. , in which, wherever possible, all the machines required for a certain job are grouped together. This avoids all the waiting and moving time involved in sending half-finished items from one department to another, although it often requires flexible, multi-skilled employees.

JIT thus greatly reduces transportation and inventory costs, and should ensure that there is no waste from overproduction, or from idle workers waiting for parts. It allows increased productivity because of shortened throughput time. If factories are equipped so that set-up times are short, very small production runs are possible. Any quality problems or product defects should be noticed more quickly, production (8) ….. are reduced, and the firm can react more rapidly to demand changes.

Date: 2015-01-29; view: 1494