Just in time

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With improvements in the virtually every industry, maintaining an effective production line while minimizing inventory costs is a very feasible option. Just-in-time systems are designed to keep inventory costs at a minimum.

Most performance measures are derived from the cost accounting information that is provided the finance department. The most two know costing system are the job-order costing, and the process costing. Both systems try to allocate the cost across the unit produced. This allocation process is known as the absorption rate.

Audits and control is another tool that can be used to ensure proper collection of data, and proper analyzing of these data in the processes. This point requires intensive labor which may cause delays sometimes. Here is some of the procedure that is being done at the audits and control process

• Cycle counting

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• Account payable periodic payments

• Account receivable periodic payments

• Quality at the source

Another important tool that is being used when implementing JIT is the supply chain management. In this process it is important to establish a relationship with the supplier, the supplier's supplier, and the customers. Suppliers and customers become an extension of the company's operation. It is a procedure that will track the product from the supplier warehouse, to the consumer's house.

The implementation of JIT in a business requires many managerial decisions to be made. They must first consider the cost of JIT implementation and the tradeoffs they are willing to make. Management must completely committed to the JIT, abandon any old plan, and lead the organization along the way. They are responsible to prepare the climate for any changes in the organizations' culture.

Traditionally, organizations are arranged in a top-to bottom hierarchical format. Unlike traditional organizational structure, JIT is structured on a team approach with more of a horizontal format.

Education and training are vital to a successful JIT implementation. Like any other new technique, proper training must occur in the early stages. Proper training and understanding of the new technique flows through the following stages

• Upper management education

• middle management, line supervisor, and staff education

• Workers education

• Implementation facilitator education.

Management, New York Pitman, 16 Harrison A, Just-in-time

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