contrast just in time processing with conventional manufacturing practices 458459

Contrast just in time processing with conventional manufacturing practices.

Just in time (JIT) processing is not just a method of reducing inventory. It is embraced as a philosophy that emphasizes eliminating waste from all processes. Inventory is simply a buffer that protects a process against unreliability (such as poor supplier delivery or machinery that breaks down frequently). Reducing inventory levels without correcting the problems that create unreliability will stop production. Constructing a reliable system will eliminate the need for an inventory buffer.

Exhibits 9 and 10 on page 918/919 of the text(Accounting/warren/24e) illustrate the production line and flow of products under a traditional and a JIT system. Review these diagrams with your students and emphasize the following points.

1. JIT organizes work cells that perform several manufacturing steps. Workers are cross trained to perform more than one task. This allows manufacturing to be more flexible and gives workers more pride in the final product.

2. Because products do not move between as many departments, the non value added cost of transporting products and parts is reduced.

Employee involvement in a JIT system also implies employee accountability. Employees cannot be either involved or accountable without information. If employees are to be accountable for financial performance, then they will need access to financial information. Therefore, financial information cannot be limited to managers in a JIT organization. All employees must have access and be trained to interpret financial data.