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Just-In-Time (JIT) is often perceived as the ideal solution for optimizing production: Minimize inventory, Produce on demand, Optimize responsiveness, but behind this promise of efficiency lies a much more complex reality: How can smooth and waste-free production be ensured without strong collaboration between all players in the value chain?
Let’s take a concrete example: a manufacturing company that operates in JIT receives its parts on a just-in-time basis from several suppliers. If one of them experiences a delay in delivery – due to a stock shortage or a logistical problem – the entire production stops. A single flaw in the gears and the machine seizes. This kind of situation illustrates the challenges of a poorly structured JIT.
How can these conditions be maintained if information does not circulate properly between all the links in the chain? This is where the importance of a strengthened collaborative ecosystem comes in.
Just-in-time: a fragile balance without a strong collaborative ecosystem
Lack of visibility: a brake on anticipation
For a company to optimize its Just-in-Time management, it must have perfect control of its stocks and flows in real time. A lack of visibility on these elements complicates the anticipation of needs and increases the risk of shortages. The use of technologies such as ERP and real-time traceability systems becomes essential to ensure accurate monitoring and avoid unforeseen events.
The example of the automotive industry illustrates this challenge well. In 2021, the global shortage of semiconductors severely disrupted the production of many manufacturers, including Toyota, which pioneered JIT. Without sufficient visibility into the availability of these components, some production lines have had to slow down or even stop, causing significant financial losses and delivery delays for customers.
Risk of production disruption: serious financial consequences
Even a small delay from a supplier can lead to major production stoppages. In a JIT model, where buffer stocks are reduced to the bare minimum, each logistical failure can cause considerable losses. The establishment of strong partnerships and efficient logistics is therefore crucial to limit these interruptions and ensure smooth production.
History shows us that unforeseen events can severely disrupt businesses operating in JIT. For example, in 2011, the tsunami in Japan destroyed several electronic component manufacturing plants, directly affecting the production of major automakers like Honda and Nissan. Deprived of some essential parts, their assembly lines were forced to slow down, proving how an over-reliance on a small number of suppliers can weaken a JIT system.
Over-reliance on suppliers: a strategic risk
The success of JIT is based on perfect synchronization between the different actors in the supply chain. A company that is overly dependent on its suppliers, without effective communication and careful planning, becomes vulnerable to even the slightest disruption. Diversifying sources of supply and adopting flexible contracts can reduce this risk and ensure greater resilience to market hazards.
Apple is a good example of this problem. In 2022, one of its main suppliers in China, Foxconn, had to slow down production due to strict health restrictions, significantly disrupting the assembly of iPhones. This incident highlighted the risks of over-dependence on a single supplier or country. In response, Apple has strengthened its diversification strategy by expanding its production to other countries such as India and Vietnam, in order to secure its supplies and reduce its exposure to localized crises.
Levers to strengthen the collaborative ecosystem and optimize JIT
Digitization of flows to synchronize actors
In a JIT production environment, every link in the value chain must be perfectly synchronized to ensure that the right materials, information, and resources are available at the right time. Digitalization plays a key role in ensuring this real-time synchronization.
One of the challenges of JIT is to provide instant visibility into open orders, inventory levels, and production status. Platforms such as iObeya make it possible to unify all the data on an interactive visual management board, accessible to all stakeholders. These tools optimize the feedback of essential information to the right actors, at the right time and in the right place, and ensure immediate responsiveness to unforeseen events.
Integrating suppliers with ERPs and Lean tools helps to avoid delays in transmitting information. Updates to inventory levels and production requirements are automated and accessible in real-time, significantly reducing the risk of stock-outs or overstocking. A car manufacturer, for example, can immediately adjust its production according to order forecasts and spare parts deliveries, without waiting for information to be exchanged by email or phone.
By digitizing flows, companies transform a set of players into a synchronized, agile and responsive ecosystem.
It's much easier to share a screen or a room, it's much more transparent. Everyone knows that the information will be seen by the leaders. Overall, escalation is 25% faster because we can quickly and easily include finance, supply chain, or other services in the meeting, rather than sending emails.
Operational Excellence Manager and iObeya System Owner, Sanofi Framingham site.
The importance of collaborative rituals and Lean Management
Even with the best digital tools, people remain at the heart of JIT. Collaboration also involves well-established rituals that structure the work and facilitate quick decision-making.
Short, frequent meetings, such as daily stand-ups or coordination points, help align teams with the day’s priorities. The use of a digitalized visual management, such as the Kanban panel offered by iObeya, facilitates these exchanges: each team can visualize the progress, blockages and necessary adjustments in the blink of an eye, without wasting time.
In the Toyota Production System, kanban plays a fundamental role in ensuring smooth and efficient management of production flows. It is a visual just-in-time (JIT) inventory and production management system that aligns the supply of parts and components with the actual needs of assembly teams. Thanks to kanban, suppliers receive accurate signals on quantities and delivery times, thus avoiding overproduction and excessive stocks, while ensuring a continuous and optimized supply. This mechanism helps to improve the responsiveness, flexibility and overall efficiency of the production line.
Watch the video to see how Toyota uses Kanban to optimize its just-in-time production.
Real-time monitoring of KPIs is also essential. JIT only works if the company closely monitors its performance indicators: stock levels, delivery times, production rate, quality, etc. An automatic update of KPIs and a clear visualization via digital tables, such as the SQCD panel offered by iObeya, make it possible to immediately adjust production in the event of a deviation. This approach is part of a dynamic of continuous improvement, a fundamental principle of Lean Management.
These rituals ensure smooth coordination between all teams and avoid late decision-making, which can compromise the fluidity of the JIT.
Just-In-Time is a high-performance, but demanding, model that relies on flawless coordination between all the players in the chain. Inventory reduction and responsiveness are not enough without real-time visibility, seamless collaboration and the right digital tools.
To mitigate risk, companies need to strengthen their collaborative ecosystem through digitalization, effective lean practices, and supplier diversification. Only those that are able to anticipate and adapt their organization to the unexpected will take full advantage of the advantages of JIT without suffering its flaws.
