Just-In-Time and Lean Strategies

Introduction

This post discusses the relationship between Just-In-Time (JIT) manufacturing and Lean strategies. We begin by (trying to) define each of these separately, then examine how they work together as JIT/Lean. Next, the relationship between JIT/Lean and total quality management (TQM) is discussed. We conclude by noting that while JIT/Lean strategies seek to advance the goals of TQM, it does not advance all the goals of TQM.

Just-In-Time Manufacturing

Just-In-Time (JIT) manufacturing is a production strategy that minimizes waste by ordering and producing goods on an as-needed basis, directly in response to customer demand. JIT manufacturing is a pull system, so there is no need to rely on forecasts (which is a push system). There is little or no inventory holding costs since production is triggered only when the customer demands it. Besides low inventory holding costs, one of the other advantages to requesting parts only as needed, there is reduced risk of waste in the forms of spoilage (in the case of perishable goods) or obsolescence (for manufactured goods).

Lean Manufacturing

Like JIT, Lean manufacturing is also concerned with reducing waste, but on a broader scale. Goetsch & Davis (2021, p. 377) state that there are seven types of waste that Lean manufacturing seeks to minimize:

• Overproduction
• Wait time
• Transportation costs
• Processing
• Inventory
• Unnecessary motion
• Product defects.

These include wastes not strictly covered by JIT, in particular transportation costs and unnecessary motion.

Comparing the Strategies

It makes sense to combine these two manufacturing philosophies, as they were both invented by Taiichi Ohno (1912 - 1990). As Ohno was employed at Toyota Motor Corporation, the system was initially called the Toyota Production System (TPS) and was seen as an alternative (or refinement) of Henry Ford’s mass production system. As it spread to other industries, it gained the name Lean manufacturing.

Goetsch & Davis do indeed combine JIT and Lean manufacturing, calling it JIT/Lean, which they roughly define as follows:

Just-in-time/Lean is producing only what is needed, when it is needed, and in the quantity that is needed. (p. 376)

This definition doesn’t include the full scope of Lean manufacturing, however.

Combining JIT/Lean with Total Quality Management

JIT/Lean manufacturing integrates well with total quality management (TQM) manufacturing. In particular, by minimizing the production of defective goods, companies following JIT/Lean are concerned with increasing the quality of their goods. Since the system operates only in response to customer demand, product defects are identified early and corrected. Finally, since the JIT/Lean operates as a pull system, it is inherently concerned with customer satisfaction.

This is essentially the conclusion of Cua, McKone & Schroeder, (2001). They combine TQM and JIT together and find that they are compatible with each other as well as with something called Total Productive Maintenance (TPM).

Tesfaye & Kitaw (2017) claim that integrating TQM and JIT are insufficient to guarantee organizational success and requires “interaction between the core company and the external stakeholders (such as governmental organizations, universities, banks, research institutions, and others)” as well as what they call “technological capability accumulation.” This latter refers to transferring and adopting knowledge into the company instead of being “just passive receivers and users of foreign technologies.” (Tesfaye & Kitaw, 2017, p. 22).

The research by Tesfaye & Kitaw (2017) focused exclusively on Ethiopian leather and leather manufacturing companies, but the lack of technological capability accumulation occurs in other industries, even in software companies. Software and IT companies “burn through” technologies at an incredible rate, caused by employee turnover as well as the idea of rejecting older technologies in favor of adopting “the new hotness.”

Conclusion

JIT and Lean are both strategies that improve manufacturing processes. Both are concerned with eliminating waste in such processes, with JIT concerned with minimizing inventory holding costs and minimizing costs that result from spoilage and obsolescence. Lean improves on this by minimizing additional types of waste such as wait times and transportation costs.

JIT/Lean brings the benefits of TQM – improved quality and focus on customer satisfaction – but only to production departments. Companies practicing TQM require continual improvement and customer focus of all departments of a company, whereas JIT/Lean is applicable to production departments. As such, JIT/Lean works well with TQM, but it is distinct from TQM.

References

Cua, K., McKone, K., & Schroeder, R. (2001). Relationships between implementation of TQM, JIT, and TPM and manufacturing performance. Journal of Operations Management 19(6), 675-694. https://doi.org/10.1016/S0272-6963(01)00066-3

Goetsch, D. L. & Davis, S. B. (2021). Quality management for organizational excellence: Introduction to total quality (9^th ed.). Pearson.

Tesfaye, G. & Kitaw, D. (2017). A TQM and JIT integrated continuous improvement model for organizational success: An innovative framework. Journal of Optimization in Industrial Engineering 22,15-23. https://doi.org/10.22094/joie.2017.265