The Just-in-Time Production System: Logistics, Inventory Management, Assembly Line, and Staffing Fundamentals

Discover the power of the "Just-in-Time" Production System in lean manufacturing. Uncover its core ideas, techniques, advantages, and disadvantages, along with real-world examples in this insightful article.
A spacious, modern factory floor featuring various car parts arranged on blue metal racks. Overhead cranes and other industrial equipment are visible, with bright lighting illuminating the high ceilings and clean, organized workspace.
Published on:
30 January 2024
Updated on:
03 June 2024

The “Just-in-Time” Production System is a popular jargon among lean manufacturing practitioners. It can deliver razor-sharp cost-cutting benefits that no other system could match. Yet, it’s also an incredibly challenging system to follow – and highly risky”.

You might ask, what does it mean to be “just-in-time” in manufacturing? How do you implement this system? And how can the just-in-time production system improve your plant’s production process efficiency?

In this article, we explore the core ideas of the just-in-time production system, its techniques, its advantages & disadvantages, and examples to illustrate its application in the real world. We will also compare the just-in-time vs just-in-case production systems – as both are equally popular philosophies among manufacturers, yet they possess contrasting methodologies.

In the final section of this article, we will also provide you with a freely downloadable lean manufacturing e-book PDF. With it, you can immediately start your plant’s transition to the just-in-time production system and become an all-around lean manufacturer.

What Is the Just-in-Time Production System?

The just-in-time production system is a lean manufacturing philosophy that seeks to synchronize a customer’s order with the entire manufacturing process of a product. This system ensures that all materials and components needed to manufacture a product arrive at the assembly line precisely when needed – not too early or too late.

The idea is that if a material or component arrives precisely when needed – it can be directly brought to the assembly line – without needing to be stored as an inventory. This means that the manufacturer doesn’t need to build or rent a warehouse, hire workers to manage the warehouse, and spend on other storage-related expenses.

Sometimes, having an inventory of materials & components in your plant is still necessary. Having a stockpile of your finished products in distribution centers is also a good idea for some products to avoid product shortages.

After all, supply chain disruptions can always happen. Unexpected factors such as natural disasters, employee strikes, and other force majeure can occur anytime.

However, the less inventory is needed, the better. In the following sections of this article, we will explain the techniques commonly used to implement the just-in-time production system.

The Pull System

The just-in-time production system follows the pull system production method. Under the pull system, a product will only be made if there’s already an order from the customer. Thus, it’s as if the customer “pulls” the product they’ve ordered from the factory.

If there’s no customer order, a product will not be made. If there’s an order for 10 units of a product, a plant will only manufacture precisely these 10 units – not one unit more or fewer.

The entire process, starting from sourcing materials and components, employee task division, until product delivery, is planned for these 10 product units. Nothing more, nothing less. Not even a single extra screw will be procured beyond what’s needed for these units. A famous lean manufacturing quote sums it up nicely: “making only what’s needed, when it’s needed, and in the quantity needed.”

The pull system has its advantages. For starters, a product will always have a buyer, as it will only produced if there’s an order from the customer. Theoretically, all your products will be profitable, and no product will ever be left unsold.

Moreover, storage space is unnecessary since a finished product will be immediately sent to the customer. There’s no need to store materials and components, as they will all be used in the assembly process – leaving none as inventories. Therefore, your organization doesn’t need to build/rent and manage a warehouse, thus cutting your organization’s operational expenses.

Close-up of a row of modern cars in a well-lit showroom or factory. The focus is on the side of a shiny blue car, highlighting its sleek design and polished surface. Rows of overhead lights create a bright, reflective environment.

Production Timeline Synchronization

The pull system might seem strict and inflexible. Yet, the just-in-time production process takes it a step further. Not only must all production resources be synchronized, but the entire production timeline must be planned and synchronized as well.

This means there must be a set schedule for each phase of the production process. Here’s an example of how a just-in-time production system works:

Example of the Just-in-Time Production System in Action

Let’s say that Steve works for Dash Automobiles, a car manufacturer. Steve’s assembly line is in charge of assembling the knock-down kit of Dash Hippo – an SUV from Dash Automobiles. His assembly line must assemble the following components in the precise order as shown below:

  1. The chassis
  2. The car’s body
  3. The car’s electrical components
  4. The engines and hydraulics
  5. The car’s interior
  6. The windshield and the car’s windows

These components are not made in Steve’s factory. Some components are sourced from other Dash Automobiles factories specializing in producing these components. Meanwhile, some other components are sourced from third-party suppliers. Steve’s assembly line assembles all these components into a fully functional Dash Hippo car.

Dash Automobiles follows the just-in-time production system. Thus, Steve must communicate with the person in charge of each supplier factory that makes these components so that the chassis will come first, followed by the car’s body, then the car’s electrical components, and so on, until the last components arrive: the windshield and the car’s windows. For example, the chassis must arrive at Steve’s plant at 10 am, the car’s body at 10:05 am, the car’s electrical components at 10:10 am, and so forth.

Suppose everything goes according to plan and there are no delays. In that case, these components will be brought directly to the assembly line and bolted or welded immediately to the cars that are being assembled.

After a car’s assembly has been completed and passed all of the quality control checks, it will be delivered immediately to the ordering customer. Thus, neither components nor finished cars are ever stored. This means that Dash Automobiles doesn’t need to build or rent a warehouse and pay the salaries of warehouse employees- cutting its operational expenses significantly.

This illustration is merely an oversimplified example of how a just-in-time production system works on an assembly line that produces cars. In real life, a car’s assembly process is much more complex. Check out this interactive content from Toyota showcasing a car’s entire manufacturing process, from cutting steel plates up to its quality inspection.

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Just-in-Time Production System and Lean Manufacturing

Similar to other philosophies like Kaizen, Jidoka and Heijunka,  the just-in-time production system has its roots in lean manufacturing and Toyota. However, there are also lean manufacturing philosophies that originated from outside Toyota, such as First Time Right.

The modern lean manufacturing doctrine started when Taiichi Ōhno – an industrial engineer working for Toyota, visited the US in 1956. During his visit, he learned directly from American automotive manufacturers’ shop floors and noted their strengths and weaknesses. In addition, he was fascinated by the then-new concept of American supermarkets. In supermarkets, customers can “pull” their desired product from the shelf, and a store clerk will simply refill it afterward.

Upon his return to Japan, he developed the Toyota Production System (TPS) – often regarded as the precursor of the modern lean manufacturing movement. TPS is extremely powerful, making the production process much faster while cutting costs here and there.

A good illustration can be seen in this McKinsey article, written by Deryl Sturdevant, a former President and CEO of Canadian Autoparts Toyota (CAPTIN). He says changing the die needed to make aluminum alloy wheels using conventional methods takes 4-5 hours. Yet, applying TPS in his plant takes less than an hour to complete the same task.

This is just one of the countless innovations the TPS has brought to the shop floor. With this efficiency boost, it’s no surprise that Toyota dominates the global automotive market. As of 2022, Toyota was the world’s best-selling automotive manufacturer, a title it defended for three consecutive years.

Thanks to this success, the lean manufacturing doctrine is widely used worldwide across all industries. The lean manufacturing doctrine consists of 5 principles that must be followed step-by-step, as shown below:

  • Identifying What Your Customers Value
  • Value Stream Mapping
  • Creating a Lean Manufacturing Flow
  • Establishing a Pull System
  • Kaizen (Continuous Improvement)
A five-step process diagram for lean manufacturing, presented in blue arrow shapes. The steps are: 1. Identifying What's Your Customers' Value, 2. Value Stream Mapping, 3. Creating a Lean Manufacturing Flow, 4. Establishing a Pull System, 5. Kaizen (Continuous Improvement).

Learn more about the 5 lean manufacturing principles in our dedicated article.

These 5 principles are aimed at removing the 8 forms of waste in lean manufacturing, which are:

  • Defective Products
  • Excessive Processing
  • Overproduction
  • Idle Resources
  • Having to Store Items
  • Unnecessary Motions
  • Transportation
  • Underutilized Human Resources
A grid of eight blue icons representing different types of inefficiencies. Labeled: Defective Products, Excessive Processing, Overproduction, Idle Resources, Having to Store Items, Unnecessary Motions, Transportation, and Underutilized Human Resources.

Occasionally, lean manufacturing is mistakenly referred to as “agile manufacturing.” Sometimes, both terms are even used interchangeably. However, despite having similar names, agile manufacturing and lean manufacturing are separate concepts with differing doctrines and goals.

Just-in-Time Production System Techniques

The just-in-time production system covers a product’s manufacturing process, from sourcing its materials and components to its distribution to the customer. Here’s what you need to know about implementing the just-in-time production system in each production phase:

Just-in-Time Logistics and Inventory Management System

The first phase of any production process is to get the materials & components needed to make a product. And most likely, these materials & components are sourced from outside your plant. Thus, the delivery and storage of materials & components that need to be handled.

The needed materials & components must arrive at your plant at the exact time when they’re needed at the assembly line. If they arrive “just in time,” you can put these materials & components directly into your assembly line – without ever storing them. Or, even if you need to store them, you should keep materials & components inventory to a minimum.

This financially wise strategy saves your plant’s funds on inventory-related expenses. The smaller the inventory space and the fewer warehouse employees your plant needs, the better.

But how can you organize this just-in-time logistics and inventory management? Here are some strategies on how to run a just-in-time logistics and inventory management system:

Order Your Materials and Components Sufficiently, but Not Excessively 

As previously mentioned, the just-in-time production system follows the pull system method. This means that all parts of the production process, including sourcing materials and components, will only start once there’s a customer order.

Furthermore, always order materials & components in a quantity that matches the needs to fulfill your customers’ orders. If you order too few, you will have shortages that will disrupt your production process. On the other hand, ordering too much will mean you’ll need to allocate some storage space and workforce to handle this surplus, defeating the whole purpose of an inventory-minimum just-in-time production system.

Have a Direct Line of Communication With Your Suppliers

It’s crucial to have all of your suppliers’ telephone numbers, as telephone calls are still the fastest method of communication. In the just-in-time production system, speed is everything. When you need to adjust the flow of materials and components to your plant with your suppliers, you can immediately do it in a matter of minutes through a phone call.

Having a list of backup suppliers on top of your existing suppliers is also recommended. Therefore, when there’s a disruption with one of your existing suppliers, you can immediately replace them with a backup supplier. This ensures your assembly line remains fully operational, even when faced with supply chain disruptions.

Prioritize Local Suppliers

When choosing materials and components suppliers, it’s ideal to prioritize suppliers not too far away from your plant. The greater the distance is, the higher the likelihood of supply chain disruption, especially if it involves international shipping.

For example, the ongoing Russia-Ukraine conflict has caused supply chain disruptions for energy, grain, and fertilizer-related products. Or the frequent shutdowns of factories in China during the COVID-19 pandemic that caused shortages of various electronic goods globally.

Sometimes, due to low labor costs and proximity to raw materials, suppliers in faraway countries can offer you a better deal compared to your local suppliers. Nonetheless, it’s essential to balance supplier competitiveness and supply chain security.

Use Inventory Management Software.

Besides improving your supply chain, digitalizing your plant’s inventory system is also necessary. The easiest way is by using inventory management software.

A good inventory management software feeds 24/7 information on your plant’s inventory level to your PC in a data visualization dashboard. Hence, you don’t need to continuously go back and forth to your warehouse to check your inventory level. It will automatically notify you if your inventory level appears low, prompting you to resupply from your suppliers.

This ensures that there are always sufficient materials and components for your assembly line. There are numerous inventory management software available on the market. Some well-known ones include Zoho InventoryCin7, and inFlow.

Two workers in safety gear unload boxes from a truck inside a large, well-lit warehouse. Stacks of packages and a forklift are visible in the background. The warehouse appears to be organized and busy, with multiple pallets and shelving units.

Just-in-Time Assembly Line

Now that the materials & components procurement aspect has been covered, it’s time to move to the next phase of the production process: the assembly line. Here are several tips for achieving a just-in-time assembly line:

Automate As Much As Possible

In the just-in-time philosophy, machines are preferred over human employees in the assembly line. Machines can work faster, more precisely, and longer with less downtime than an average shop floor employee. Machines can also bear extreme temperatures, pressures, and impacts that no human employee can withstand.

A machine’s operational cost is often lower than a human employee’s. Thus, for repetitive tasks that don’t require reasoning, creativity, and other human-centric qualities, assigning them to your machinery over human employees is preferred.

Standardize Everything

In the just-in-time production system, everything must be standardized. This includes:

  • Highly detailed work instructions for each production phase. The more detailed they are, the better. For example, it takes 4 nuts to attach a wheel to a car’s body, not 3 or 5.
  • The time required to complete a production phase. Bolting a car’s body to its cabin takes a maximum of 50 seconds, for example.
  • All measurements in the production process. It will take 5 liters of paint to coat a car’s entire body.
  • Health and safety-related protocols. “All employees must wear a helmet on the shop floor.”
  • The equipment and machinery used in the production process. “Only use an ½” Inch torque wrench to install a car’s brake disc.”

The reason for this extra-tight standardization is to prevent unwanted variations. Under the just-in-time production philosophy, unwanted variations are a threat, as they can lead to defects. Even a tiny defect can mean temporarily pausing your assembly line.

The just-in-time production method is very time-sensitive. As the name suggests, everything must be “in time.” A defect in just one product will delay the production process of all other products that happen to be in the assembly line. Therefore, it’s in your best interest to standardize everything to minimize the possibility of defects in your products.

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Just-in-Time Transport and Delivery

After a product’s assembly process is done and it has passed the quality control check, the next phase is its distribution. A product can be sent directly to the customer or a distribution center. Either way, they must arrive at their destination immediately so your plant doesn’t need to store them.

You can use real-time tracking tools to achieve a just-in-time transport & delivery. Some dependable delivery tracking software includes 17TRACKParcelTrack, and AfterShip.

The delivery tracking software will always inform you of your ongoing deliveries in real-time. If you notice any potential delay, you can notify your customers and distribution centers promptly so that they are informed and can anticipate any possible delay.

Just-in-Time Staffing

In addition to applying just-in-time techniques in your logistics, inventory, assembly line, and delivery & transport networks, it’s also necessary to use just-in-time staffing. Just-in-time staffing is a business strategy where organizations employ workers only when they are specifically needed.

This system is relevant to the pull system in production, where goods will only be produced once confirmed customer orders are placed. Since customer demands are likely to fluctuate from time to time, so should your workforce size.

Being understaffed will negatively affect your plant’s ability to fulfill customer demands, not to mention the negative toll on your workers’ mental & physical health and the increased likelihood of workplace accidents it will have due to fatigue. Similarly, being overstaffed is also not a good thing. Some workers in your payroll will be idle and not produce any value for your plant.

An excellent solution to implement just-in-time staffing is by hiring workers temporarily instead of permanently. This model grants your organization a high degree of flexibility in adjusting your workforce size.

Employment agencies are the best source for finding flexible workers. Major European agencies offering this employment model include RandstadAdecco, and Hays.

Kanban Board in the Just-in-Time Production System

A Kanban board is any just-in-time production system practitioner’s best friend. In its essence, a Kanban board is a board divided into several sections. Each section represents a production phase. These phases commonly include terms such as “to do,” “in progress,” “testing,” “done/completed”, and “backlog/stuck.”

Once the Kanban board has been divided into these sections, you can attach Post-it sheets to this board. Each Post-it sheet represents a product in your assembly line. You then move these post-it sheets in the Kanban board according to the production process in the assembly line. When implementing the just-in-time production system, a Kanban board helps significantly. It visualizes the production progress of each product.

The just-in-time production method demands that everything be on track, and delays must be avoided at all costs. Hence, a Kanan board allows you to keep track of your entire production process and will inform you if there are problems along the way. Learn how a Kanban board works.

A digital Kanban board with columns labeled Backlog, To Do, In Progress, Testing, and Done. Each column contains various colored sticky notes and task cards, representing tasks at different stages of completion in a project management workflow.

Just in Time vs Just in Case

The just-in-time production system is the perfect philosophy for any manufacturer that desires to cut corners wherever possible and achieve peak production efficiency. However, this philosophy assumes that everything will always go as planned & on time, and unexpected problems that might arise along the way are not considered.

In reality, unforeseen issues can occur at any moment and strike at any part of your production process. Be it in your logistics or assembly line. Issues such as natural disasters, unexpected machine breakdowns, employee strikes, and other unexpected problems must also be considered.

Responding to the just-in-time production method’s zero tolerance of unexpected issues, some practitioners adopted the “just-in-case” philosophy. As opposed to just-in-time, the just-in-case philosophy encourages you to have a sufficient stockpile of materials, components, and finished products in your inventory. This stockpile is a buffer for any logistics and assembly line disruption.

Here’s an overview of the just-in-time vs just-in-case philosophies:

A comparison table of Just-in-Time vs Just-in-Case Production Systems. It lists characteristics, advantages, and disadvantages for each system. Just-in-Time emphasizes minimal inventory and efficiency, while Just-in-Case focuses on sufficient inventory and risk management.

As can be seen, both just-in-time and just-in-case production systems have their fair share of advantages and disadvantages. There’s no perfect production system. In some industries, the just-in-time method is more suitable, while the just-in-case one is preferred in others.

In industries where goods are produced in massive quantities, a single product costs little resources to manufacture, and customer demands are stable, the just-in-case method is more suitable. The fast-moving consumer goods and textile industries are examples of where the just-in-case production system is preferred.

Meanwhile, the just-in-time production system is better suited in industries where goods are produced in a low quantity, it takes lots of resources to manufacture a product, and customer demands are not always stable. The aerospace industry is a sector where the just-in-time method is widely used.

Adopting the Just-in-Time Production System With Azumuta

With its extremely thin flexibility and low-risk tolerance, you can’t afford to commit any mistake in just-in-time production. A single defective product or a delayed assembly line by just a few seconds can quickly derail your entire production process – causing tremendous financial losses.

But worry not; with Azumuta on your side, implementing the just-in-time production system will be much easier. Our feature-rich software offers numerous functionalities, such as:

Digital Work Instructions

In the just-in-time production process, everything must be standardized. Be it work procedures, the equipment & tools that are used, and the production timeline. All of that must be communicated as clearly as possible to your shop floor operators. And that’s precisely why you’ll need our Digital Work Instructions module.

This module allows you to create paperless, visually intuitive work instructions supported by visual elements such as videos, schematics, symbols, and even 3D models. All in a matter of minutes – thanks to our drag-and-drop interface.

With it, your work instructions will be crystal clear, leaving no room for any doubt on the shop floor. This certainty prevents all sorts of mistakes – intolerable in the just-in-time production system.

In addition, ensure that everything is on track by capturing real-time pictures and videos from the shop floor. Our software grants multiperson access so any authorized employee can use and contribute to your work instructions.

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Audits & Digital Checklists

In the just-in-time production system, pinpoint precision is the name of the game. Everything, even the micro-details, such as the number of bolts that need to be bolted into a product – must be on point. There’s no room for any error at all.

But how can you achieve that? We’re only human, after all, and mistakes can happen now and then. Fortunately, our Audits & Digital Checklists module can error-proof your entire production process.

Easily plan and execute audits and inspections with our user-friendly software.  Never miss a single detail, thanks to our user-friendly digital checklist. Moreover, this module can automatically convert your audit and inspection results into easily understood reports – saving you time from needing to manually draft them.

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Quality Management

Having a defective product or even having to recall your products due to defects is a catastrophe in the just-in-time production system. Recalls are costly and will certainly damage your reputation. Furthermore, you will need to allocate some of your production capacity and your employees’ time to address these past errors – derailing your already schedule-tight production targets.

You can prevent defects using our state-of-the-art product ordering system in our Quality Management module. Each product will have its own product report, granting a thorough quality control process. Once a defect has been detected, use our ticketing system to keep track of the issue until it is resolved. No defective product will ever be shipped to your customers.

Further increase your quality control reach by integrating your peripheral devices to your PC, tablet, and smartphone with our module. Countless peripheral devices, ranging from weighing scales to 3D printers can be integrated into our software. Hence, you can simultaneously monitor your products’ quality while they’re being produced – adding an additional layer of quality control.

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Skill Matrix & Training

The readiness of your employees is the key determining factor of whether your organization can adapt to the just-in-time production system. Therefore, organizing routine, just-in-time-focused training programs is in your best interest.

Our Skill Matrix & Training module is the perfect tool for this role. With this module, you can effortlessly plan short and long-term training programs, attach training materials, select participating employees, and send automated reminders for your employees.

Besides having just-in-time training, assessing your employees’ performance from time to time is critical. Use our visually intuitive skill matrix for this purpose. Use our pre-existing template so you don’t have to draft the matrix from scratch. Our software will automatically color-code and calculate the average skill value of your employees.

Moreover, you can create an individual performance report for each employee. This automatically-generated report contains abundant information, ranging from their skill levels to their training history. This means that assessing your employees has never been easier. Ensure that your employees’ skills are always up to date with our Skill Matrix & Training module.

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Free Lean Manufacturing E-Book

Deepen your understanding of the lean manufacturing doctrine through our free downloadable e-book.

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Witness how Azumuta’s modules have helped a client to reduce human error-related complaints by 60%, speed up employee training by 60%, and reduce the time needed to create and manage manufacturing-related work instructions by 50% – all in just 3 months of implementation.

Be sure to check out other success stories where Azumuta’s modules have drastically improved our clients’ production efficiency. Look no further; Azumuta has the most comprehensive lean manufacturing software tools available in the market.

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