Any manufacturing organization knows that keeping excess inventory is costly. A proven way to keep it low? Just in time (JIT).
JIT is essentially an inventory strategy that reduces in-process inventory and the associated carrying costs. Developed in the 1970s by Japanese Taiichi Ohno of Toyota, the philosophy of JIT advocates a lean approach to production, by minimizing waste (i.e. inventory) and improving quality. Factors that typically increase costs without adding any value include inventory, overproduction, work stoppages, machine downtime, poor quality resulting in defects, set-up time, and even time spent moving product from one space to another.
A true JIT approach therefore requires focusing on continuous improvement in every step of the manufacturing process, not just in inventory reduction. However, JIT only works if you can rely on your suppliers to deliver parts of sufficient quality at a reasonable cost, on time, every time.
This makes supplier relationships extremely important. So what can you do to establish a reliable JIT supplier base?