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The Benefits of Just-in-Time Inventory

When he talks about Toyota and what his method is for inventory in the warehouses and shops, he uses grocery stores as an example. When you shop in a grocery store, you buy what you need, and when you take the product you take, the store is able to restock the same amount of items you took so that they always have enough. This same concept is one that he wanted to adopt so that they could free up space in warehouses for other things to take place, the just enough inventory concept.

Key Takeaways:

  • Many manufacturers have tried to imitate Toyota without understanding the underlying concept or motivation, which might have led to the failure of those projects.
  • Toyota’s founder used the American supermarket as his model for what he was trying to achieve in the factory.
  • An efficient supply chain can deliver lower costs throughout the manufacturing process, and those lower costs can then be passed on to the customer, making the company’s products more affordable.

“JIT avoids the waste associated with overproduction, waiting for material and holding excess inventory. The original concept was created by the founder of Toyota. Just-in-Time means that a manufacturer makes only what is needed, only when it is needed, and only in the amount that is needed.”

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