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Tag: Inventory Valuation

JIT manufacturing

Posted in Toyota Production System

JIT manufacturing uses a more centralized approach than that found in traditional manufacturing. The use of JIT manufacturing system having an impact on:
1. Improving Traceability (Traceability) costs.
2. Improving the accuracy of product cost.
3. Reducing the need for allocation of central service costs (service departments)
4. Changing behavior and the relative importance of direct labor costs.
5. Affect the pricing system and process basic orders.

The basics of JIT manufacturing and the difference with traditional manufacturing:

1. Compared with traditional JIT manufacturing.
JIT manufacturing is a demand pull system (Demand-Pull). JIT manufacturing goal is to produce a product only if the product is needed and only for the number of requests of buyers (customers). Some differences with the traditional JIT manufacturing include:
a. Low Inventory
b. Manufacturing cells and Interdisciplinary Workforce
c. Philosophy of TQC (Total Quality Control)