Just-In-Time
JITA production strategy that aligns raw material orders and delivery with production schedules to minimize inventory holding costs and waste. JIT manufacturing produces goods only when needed, in the quantities needed, reducing storage requirements and improving cash flow.
RELATED TERMS
Lean Manufacturing
A systematic approach to manufacturing derived from the Toyota Production System that focuses on eliminating waste while delivering value to customers. Lean identifies seven types of waste (overproduction, waiting, transport, overprocessing, inventory, motion, and defects) and uses tools like value stream mapping, 5S, and kanban to continuously improve processes.
Kanban
A visual scheduling system developed as part of the Toyota Production System that uses cards or signals to trigger production and material movement based on actual consumption. Kanban implements pull-based manufacturing, where downstream processes request only what they need, reducing overproduction and work-in-progress inventory.
Work in Progress
Partially completed goods that are still in the production process, representing materials that have entered manufacturing but are not yet finished products. WIP is tracked as a current asset on the balance sheet and includes the costs of raw materials, labor, and overhead invested in unfinished items.
Material Requirements Planning
A production planning and inventory control system that calculates what materials are needed, how many are required, and when they must be available to meet production schedules. MRP uses bill of materials data, inventory levels, and master production schedules to generate purchase orders and work orders.