When it comes to the manufacturing industry, “efficiency” is the magic word. In the pursuit of lean manufacturing standards, efficient inventory management reduces costs and eliminates waste.
That’s why strategies like just-in time inventory (JIT) are so widely used today. JIT allows the receiving of goods only as needed in the production process. Thus, it increases efficiency by decreasing waste and reducing inventory costs.
Improved cash flow.
JIT inventory is ordered and received as it’s needed. Thus, there’s no need to have safety stock on hand, taking up valuable warehouse space. As a result, companies can see lower carrying costs from reduced inventory levels.
Reduced lead times.
When a product experiences high demand, the assembly line can quickly respond. At the same time, production is reduced on items with decreased demand.
Better supplier relationships.
The need for high quality raw materials, delivered on-time ensures a company is only working with reliable vendors. This can also cut under-performing vendors, reducing the time spent on vendor relations.
Within JIT inventory management itself, opportunities exist to increase efficiency even more. For instance, kitting in manufacturing is a common method used to simplify the handling of materials.
The kitting process involves grouping the parts needed during the manufacturing process. Then, the resulting “kit” is issued as a single package. The parts within a kit are commonly utilized at, or around the same time. As a result, this makes their supply as a group more efficient than supplying them individually.
When using JIT and kitting together, efficiency improves. Delays in the manufacturing process are minimized and material handling assembly time reduced.
JIT Kitting further improves quality by ensuring that the right parts are available. Also, it limits the options of numerous parts to the operator. In short, kitting can help reduce the need for assemblers to search for inventory and pull parts. Plus, kitting reduces machine downtime due to parts availability.
Don’t Go it Alone.
As with any manufacturing process, problems can arise if kitting is not properly managed. For example, if operators remove parts from complete kits, the effect ripples through the company’s manufacturing operations. The result can cause delivery delays, production slowdown, warehouse inefficiency and more.
With the right software and consulting, you too can access the benefits of JIT manufacturing, while avoiding the pitfalls. Is your company implementing a lean management strategy? If so, just in time (JIT) inventory with kitting functionality may help boost efficiency while lowering costs.
Radley provides software solutions to promote effective supply chain management. Our team of in-house experts provide consulting, software, hardware, training and support. Contact us today and re-Engineer your business process for greatest efficiency!