While every company’s goal is to make a product readily available to a customer, different leaders might have different approaches to meeting this goal.
One strategy is called Just-In-Time inventory. During World War II, manufacturers in Japan were sorely lacking resources and needed to devise a way to lower their costs and space/inventory demands yet continue their operations with little to no disruption to the customer, according to The Balance, a website dedicated to business and financial advice.
The answer they developed was to only order supplies as needed. For example, when a customer orders a Toyota truck, the company would then order enough supplies to manufacture one truck. This way, there’s no excess inventory cluttering up valuable space, and the company is only spending money on a known sale.
This strategy is largely attributed to Toyota’s manufacturing plants, however it’s been said to be related to Japanese shipyards as well. Though developed and adjusted around World War II, JIT wasn’t introduced to the U.S. until 1977 and didn’t become popular in the Western world until the 1980s. Today, many companies still rely on this system as a space- and cost-saving tactic.
Even though it’s clear that many companies value JIT for its minimalist approach to spending and storage, there are some obstacles that can easily arise with JIT.
Distribution disruptions cause a domino effect
The most obvious possibility for something to go wrong is when a supplier can’t deliver a product on time. Since all parts are ordered as needed, it’s critical that purchases arrive in a timely manner. When they do, production can begin, and the customer will be none the wiser that the factory didn’t have the essential items to build his or her purchase already on hand.
However, it takes just one instance of unplanned downtime for production to come to a hard stop. The perfect example comes from the supposed creator of JIT itself: Toyota. In 1997, the car manufacturer received all of its P-valves from one supplier: Aisin. An unexpected fire prevented Aisin from producing P-valves for weeks – which meant Toyota couldn’t obtain this essential part.
“Many companies value JIT for its minimalist approach to spending and storage.”
As to be expected according to JIT’s strategy, Toyota ran out of P-valves within a day. The company was able to work out a solution after only two days and didn’t have to wait until Aisin’s plant was back up and running. But the two days of lost sales cost the company $15 billion in revenue. Toyota could have made 70,000 cars during that time; instead, it was scrambling to find a solution.
Unplanned downtime for suppliers in a JIT supply chain such as Aisin doesn’t just affect the plant or company at which the issue occurs; it affects the company’s customers, and it’s customers’ customers as well.
Prevent unplanned downtime
Downtime can’t always be predicted. However, it’s important that facility managers take the time to regularly inspect and address issues in equipment throughout the work environment. This is especially important for managers that oversee operations at a JIT plant or one that works with a company that operates as such.
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Proactive maintenance is the practice of regularly giving equipment tune-ups, even if they’re not displaying major signs of disrepair yet. Just 10 percent or less of maintenance activity is due to unexpected circumstances at plants where facility managers make proactive maintenance a priority, according to Plant Engineer.
The remaining 90 percent of their maintenance work is carefully planned around when they know they’ll have the least business or responsibilities. Therefore, they’re able to strategically choose when to slow down operations, and how. By being in complete control of their downtime, they’re able to reduce the impact on their customers.
Every facility manager is different, and some tend to focus on other priorities than proactive maintenance. While this isn’t ideal, it’s important that they find a solution that still allows them to have their equipment regularly inspected and tuned up. By working with Miner Corp, facility managers can arrange for a regular high-quality examination and maintenance work to be conducted at their plants.
Plus, for those who aren’t sure what sort of maintenance schedule is best for them, the experts at Minor Corp can give sound advice. Contact Minor Corp to learn about how you can reduce your operations’ unexpected downtime.