History and Philosophy
Problems before JIT system were that companies can not properly calculate their
material flows. Also, there were problems with warehouses because there were
situations that in one moment warehouses are full with stocks, and in other they are
almost empty. Because of these problems it was really difficult for engineers and
managers to deal with logistics.
JIT, however, is not new. The technique was first used by the Ford Motor Company
during 1920s, but the technique was subsequently adopted and publicised by Toyota
Motor Corporation of Japan as part of its Toyota production System (TPS). In 1954
Japanese giant Toyota implemented this concept in order to reduce wasteful
overstocking in car production.
Just-in-time (JIT) inventory systems are not just a simple method that a company has
to buy in to; it has a whole philosophy that the company must follow. The ideas in this
philosophy come from many different disciplines including; statistics, industrial
engineering, production management and behavioural science. In the JIT inventory
philosophy there are views with respect to how inventory is looked upon, what it says
about the management within the company, and the main principle behind JIT.
Firstly, inventory is seen as incurring costs instead of adding value, contrary to
traditional thinking. Under the philosophy, businesses are encouraged to eliminate.