Just in Time Manufacturing Enables Rapid Time to Shipment with Lean Inventory

 

A manufacturing superstar provides its customers with rapid and reliable time to shipment while keeping inventory lean and efficient.  Superstars operate with just in time manufacturing because it is by far the most effective way to reduce time to shipment with lean inventory.

What is just in time manufacturing? 

Just in time manufacturing (aka JIT manufacturing) uses item-based lead time and supply pipeline settings to generate demand-driven jobs and purchase orders only when needed.  Just in time planning settings replace the traditional planning methods used by most small businesses in the following ways.

Replaces forecast planning with supply pipeline planning

Many small businesses use forecast planning methods such as future job explosions and blanket purchase orders to align future supply with projected demand.  Forecast planning is prone to shortages and propagates over-stocking because supply can never be perfectly synchronized with actual demand and inventory easily gets out of control.

By contrast, just in time manufacturing uses supply pipeline planning based on reorder points and minimum order quantities to generate demand-driven jobs and purchase orders at self-adjusting intervals, which minimizes shortages and prevents over-stocking.

Replaces hard linking with natural linking

Many small businesses make products to order by hard linking multi-level jobs and purchase orders to each sales order.  When an entire product structure is forcibly made to order, each component in the structure gets its own job or purchase order, even when quantities are inefficient and other jobs require the same item.  Hard linking propagates excessive numbers of inefficient jobs and purchase orders and prevents commonly used items from being planned for stocking to reduce lead times.

By contrast, just in time manufacturing uses item planning settings to  generate demand-driven jobs that link naturally level by level when items are made to order, but replenish stock independently for items planned for stocking.  This streamlines the job schedule with fewer and more consistent jobs and enables strategic stocking of key subassemblies to reduce lead times and times to shipment.

Replaces manual planning with demand-driven jobs and POs

Many small businesses create jobs and purchase orders manually from static shortage reports and BOM explosions.  Static shortage reports lack time-phasing, which means items are often ordered far earlier than needed, and manual planning is highly vulnerable to human error.  BOM explosions artificially isolate demand into product structures and fail to account for interdependent demand among products.

By contrast, just in time uses item planning settings to generate demand-driven jobs and purchase orders only when needed and in response to interdependent demand.  Demand-driven jobs and purchase orders are foolproof because it is impossible for any demand to fall through the cracks and not be actioned upon.

Time to Shipment MRP brings just in time to small businesses

Time to Shipment MRP, which is included with DBA Manufacturing, brings just in time manufacturing to small businesses.  It combines the just in time principles listed above with innovations such as time to shipment planning, supply pipeline planning, material-based job release, and prioritized production.

Manufacturing superstars operate with just in time manufacturing because it is the most effective way to reduce time to shipment with lean inventory.   With Time to Shipment MRP, any small business can use just in time manufacturing to become a manufacturing superstar and thrive and prosper in the Amazon age.

Mike Hart

Author Mike Hart

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