Application of the JIT method in the Peruvian industry

“Year of the Bicentennial, of the consolidation of our Independence, and of the commemoration of the heroic battles of Junín and Ayacucho”

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UNIVERSIDAD SAN IGNACIO DE LOYOLA

Final research

“LOGÍSTICA INDUSTRIAL (S.CH.M.)”

”Application of the JIT method in the Peruvian industry”

Professor:

Block: FC - PREINGlyC10A01T

Group: Nº 1

Members:

Alison Mariana Correa Rodriguez   (2213312)

Alondra Jasmin Bustamante Milla   (2211406)

Anabela Alexandra Ramirez Juipa   (2210285)

Axel Vassy Kepeden Nana              (2411984)

Rodrigo Gustavo Marin Santivañez (2210488)

Lima-Perú

2024 - 01

INTRODUCTION

"The application of the JIT method in the Peruvian industry”. This analysis will provide a detailed understanding of how JIT is being adapted and utilized in the Peruvian business context, as well as its effects on the productivity, quality, and competitiveness of local companies.

The implementation of JIT in the Peruvian industry has undertaken significant changes from the restructuring of production processes. new inventory management and organization, ensuring timely availability of materials and products. This transformation also includes significant investments in employee training, with the goal of better aligning them with JIT principles and practices. In addition, we seek to strengthen coordination with suppliers, which will allow us to meet the demanding standards of quality, time and costs. This close collaboration with suppliers not only facilitates the optimization of the supply chain, but also contributes to a better projection of future demand for products and services.

Leading the country towards financial growth and development, providing greater flexibility in the face of economic problems and thus promoting greater efficiency and competitiveness in the market.

Research on the application of the Just In Time (JIT) method in the Peruvian industry is crucial to understanding how this approach can influence the efficiency and competitiveness of companies in the local context. JIT has been demonstrated as an effective strategy to optimize production processes and reduce costs associated with inventory storage and management. By exploring how Peruvian companies are implementing JIT, we can identify the specific challenges they face and the strategies they employ to overcome them. Additionally, understanding how JIT impacts relationships with suppliers and supply chain management in the Peruvian context can provide valuable insights for enhancing collaboration and efficiency throughout the value network.

THEORETICAL FRAMEWORK

1.1 Just in Time (JIT) Method

The Just in Time (JIT) method is a production strategy that seeks to minimize inventories and reduce costs by delivering materials and components just in time for their use in production. This avoids the storage of unnecessary materials and reduces the risk of obsolescence or deterioration of stored products.

JIT focuses on eliminating any waste or non-value-added items in the production process. This is achieved through coordination and communication between suppliers, production and customers, ensuring that only the necessary quantity requested by the next stage of the supply chain is produced.-

In the words of Taiichi Ohno, the Japanese engineer who designed the JIT production system, “JIT means relentlessly pruning losses. When JIT is internalized in companies, waste in factories is systematically eliminated.”

The JIT method is widely applied in warehouse logistics processes in order to achieve the highest possible efficiency throughout the supply chain. However, its application requires a great deal of coordination and organization among all interacting elements in the supply chain.

1.2 Background

1.2.1 Origin

It originated in Japan in the 1950s, when the Toyota automobile company began to use its own production system called “Toyota Production System”. This system was perfected until the current Just in Time method was defined, which focuses on eliminating any element that does not add value to the production process.

Taiichi Ohno, the Japanese engineer who designed the JIT production system, described his philosophy clearly: “JIT means relentlessly pruning losses. When JIT is internalized in companies, waste in factories is systematically eliminated.”

The main objective of JIT is to minimize inventories and reduce costs by delivering materials just in time for use in production. This is achieved through coordination and communication between suppliers, production and customers, ensuring that only the necessary quantity requested by the next stage of the supply chain is produced.

1.2.2 Concepts

This method is based on several key concepts and pillars that work together to achieve efficiency and reduce costs. One of the fundamental pillars is production in small quantities, which involves producing only what is necessary to meet current demand, thus avoiding the production of surpluses that may become obsolete or deteriorate.

Taiichi Ohno, the Japanese engineer who designed the JIT production system, emphasized the importance of this strategy: "Production in small quantities is the key to eliminating waste. If we produce too much, we become a warehouse, and if we produce too little, we become an unreliable supplier."

Another key pillar is waste elimination, which is achieved by identifying and eliminating any element that does not add value in the production process. This includes reducing inventories, minimizing production times, and eliminating unnecessary processes.

JIT also focuses on coordination and communication between suppliers, production, and customers. This is achieved by establishing supply agreements and constant communication to ensure that materials and components arrive on time and in the necessary quantity.

Flexibility is another fundamental pillar of JIT. This involves the ability to adapt to changes in demand or supplies, which is achieved through the implementation of flexible production systems and training employees to handle unpredictable situations.

1.2.3 JIT Objectives

This philosophy is based on four basic pillars, which are as follows:

Highlighting the fundamental problems of the production system, fighting against procedures that tend to conceal them.

 Eliminating all waste, that is, all activities that do not add value to the product.

Pursuit of simplicity.

Establishing systems to identify problems.

1.3 The evolution of JIT

The implementation of the Just in Time (JIT) method originated in Japan in the 1950s, when the Toyota automotive company began using its own production system called the "Toyota Production System." This system was refined over time to define the current Just in Time method, which focuses on eliminating any element that does not add value in the production process.

JIT quickly spread to other Japanese industries and subsequently globally. In the 1980s, JIT became popular in the United States and Europe, where it was adapted to the specific needs of each industrial sector.

In the manufacturing industry, JIT has been widely adopted to reduce inventories and improve efficiency. Results include a significant reduction in storage costs and an improvement in product quality. Furthermore, JIT has allowed companies to adapt more quickly to changes in demand and supplies.

Additionally, in the service industry, JIT has also been implemented to reduce the amount of inventory and improve efficiency. Results include a reduction in delivery times and an improvement in the quality of services offered.

2. Principles of the Just In Time Method

JIT is based on several fundamental principles, including:

Waste Elimination: JIT seeks to eliminate all forms of waste, including excessive inventory, wait times, and defects in the production process.

Synchronized Production: Production is carried out only when needed, in the required quantity, and at the right time.

Continuous Improvement: JIT promotes continuous improvement in all aspects of the production process, encouraging the identification and elimination of problems at their root.

Supplier Collaboration: JIT requires close collaboration with suppliers to ensure timely delivery of high-quality raw materials and components.

3. Application of Just In Time Method in Peru

Some examples of the JIT method in Peru:

Manufacturing Industry: In the manufacturing sector, companies in Peru have implemented JIT principles to streamline production processes and minimize waste. For example, automotive assembly plants in Peru have adopted JIT practices to ensure that parts and components are delivered to the production line just in time for assembly, reducing inventory costs and improving efficiency.

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