Just-In-Time management is a trendy way to deal with inventory in this day and age, brought to us by the Japanese Car manufacturers - namely Toyota. It is being used in warehouses and factories all over, and some food chains have even started administering it. With the unpredictability of the real estate market, is it possible to integrate it into the real estate sector? I have this qualm about vacant buildings and abandoned buildings. If they sit for too long they do, in essence, become waste because the building and the property deteriorates or get vandalized and then no one wants to purchase it. However, what does one do with a property full of tar slab, cement slab and walls full of various chemicals of preserve? Not much, so it really becomes a whole bunch of waste, even for the eyes. So this has brought me to wonder if there is a possibility of administering Just-In_Time practices in real estate - even if it's just the way to reroute the property so that it does come to some use somehow. I am looking for business solutions as well as policy that encourages Just-In-Time. Please post anything you can think of :)
It should be possible. You have to develop the flow-chart realistically. Factors such as price-fluctuation, resources availability where and how, a critical path method for the construction, thorough market search, own money- liquidity availability, total time needed to complete the entire construction of which identify the segment that demands maximum time, etc should be factored in the flow chart. If needed complete the work part-wise. But make sure that any part may be useable at least to some extent.
JIT can be implemented here in a way. First the skeleton of the building can be developed i.e the pillar structure. Then as per market demand the walled structure can be done. Third step can be to allow customization of interiors. Here also JIT can be used.
As the garment industry do, we prepare the skeleton and then go for customising as per demand. This is in a way JIT.
Interesting. We all have differing approaches to answering the question..
Both the Empire State Building and the burj Khalifa were build using JIT methods. The Emprire State building used steel that was still warm from the furnace.
However, JIT also means that a customer is waiting for the product when it finishes. This is hard with real estate due to the long lead times involved. Have you seen the 3D printing of buildings (USC, China)? That would be JIT from the Marketing perspective. Need a 2 Bd. flat? Here it is.
Good idea, I think it can be applied using specially materials.
All business should involve material procurement planning and management, and moreover in real estate sector. This indicate that JIT is very relevant where each material need to be purchase at the right quantity, right time, right quality and at the right place to ensure efficient operation and profitable results.
Yes. In India too it can be done. Following conditions must be met:
0-The land possesion in in-hand end free of encumberances (legal or otherwise).
1-The final plan with ALL approvals ready.
2-Lead time of all the suppliers be exact and reliable.
3-The execution/implimentation/installation time-frame is clearly reliable and independent of extraneous factors.
4-Finances are arranged and payment terms and delivery schedules are fixed.
5-Allabove is signred sealed and delivered before real action-plan takes off.
I am surprised at some of the responses.
Ms Aylor clearly talks about vacant buildings, by which she means a wasting resource. JIT is involved in procurement and manufacturing, or in this case, in construction of buildings. As if it is not enough, she specifically uses the term real estate, meaning immovable property ( land and buildings on such land) and if one reads her description, she clearly uses the term "vacant buildings". That means the buildings have been constructed and physically exists. So, there is no question of construction involved.
That said, one possible JIT activity is to ensure that as soon as the building becomes vacant, it is rented or leased out to a firm or to person for a fixed or agreed term. In the meantime, possible renters or leasers are searched for and maintained in a database, and as the lease or rental term draws to a close the next renter or leaser is contracted to take the occupancy so that there are no periods when the buildings do not generate rental revenue. Maintenance of buildings can follow a JIT process so as to reduce periods of non-occupancy with such maintenance work taking place between rental or lease periods.
Digital inventory of flats under construction would bring transparency to real estate market
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