The implementation of JIT offers several advantages, including
(i) work-in-process increases
(ii) rework reduction
(iii) decreased profit margins
(iv) increase in variability to better respond to variable demand.
In my opinion JIT considerably reduces rework. If I am not mistaken, that is the premise for JIT
Which advantage JIT offers?
Is JIT refers to Just In Time? If yes agreed above points except "decreased profit margins" - why JIT decreases profit margin? Is it because JIT can reduce production cost & hence the product can sell at lower price for better competitive strategy?
Think another advantage includes reduce or minimal warehouse / storage cost of finished goods.
I present to you the advantages and disadvantages of JIT. Best regards
The principle of Just In Time (JIT) is to eliminate sources of manufacturing waste by getting right quantity of raw materials and producing the right quantity of products in the right place at the right time.
The main objectives of JIT are: 1. Produce with perfect quality. 2. Produce with minimum lead time. 3. Produce products with only those features the customer wants. 4. Produce with no waste of labor, material or equipment, every movement must have a purpose so that there is zero idle inventory.
Dear Parag Sen I agree about the advantages you listed above. But I am not agree with you that "JIT decreases profit margin". JIT decreases production cost.
Best regards
JIT should not ideally decrease Profit margin as it is reducing costs.
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