Just-in-time production examples
Just-in-time inventory systems can be seen in some of the world’s biggest product-led businesses. Toyota, Apple, and McDonald’s are some of the biggest advocates for this inventory system.
Toyota
Toyota is often credited with the development of JIT and also remains one of the most successful practitioners. They do not bring raw materials to the production floor until an order is received, minimizing inventory levels and reducing carrying costs while also allowing them to quickly adapt to customer demand and special requests.
Toyota’s approach to inventory management even has its own name — the Toyota Production System (TPS). It’s a holistic approach to manufacturing, emphasizing inventory control, workforce empowerment, and continuous improvement.
A core component of Toyota’s JIT inventory management implementation is the Kanban system, a visual signaling system that helps regulate the manufacturing process, regulating the flow of materials and ensuring that only the optimal quantities of parts are supplied.
Apple
Since Apple outsources much of its production, its approach to JIT is less about manufacturing and more about supply chain optimization. Leveraging strong relationships with its suppliers helps maintain minimal inventory at its central warehouse in the US while using dropshipping for online purchases to reduce shipping and storage costs.
Apple also uses advanced forecasting and logistics technology to synchronize its supply chain, from parts suppliers to assembly workshops to retailers, minimizing time and inventory throughout the process.
This allows Apple to introduce new products rapidly and efficiently without having the burden of excessive inventory and dead stock.
McDonald’s
To ensure freshness and consistency in customer experience, McDonald’s prepares food items like hamburgers and sundaes only after the order is placed, except during peak times when a few finished items are kept ready. This JIT adaptation, often referred to as the “made for you” system, revolutionized fast-food operations.
Similarly to Apple, McDonald’s heavily relies on a meticulously coordinated supply chain. They work closely with suppliers to ensure the timely delivery of fresh and high-quality ingredients, which is critical for the JIT model to work in the fast-food context.
Through this approach, McDonald’s minimizes their inventory holding costs and reduces food waste significantly. This not only improves profitability but also enhances customer satisfaction, or in their case, customer loyalty.
Maintaining a balance between safety stock and preparing goods make-to-order is an art that these businesses have mastered to a T, making them industry leaders in their business field.
Just-in-time inventory method for scaling businesses
Let’s take a look at how JIT is applied in a business. We will go through a just-in-time inventory case study.
The leather design studio you see in this article uses just-in-time stock to full effect. They manufacture high-end leather goods like bags, purses, wallets, and accessories. These are artisan goods, and so their raw materials are expensive. The business would be unsustainable if they made loads of stock in advance.
Instead, they use a make-to-order workflow.
Their clients can customize their orders to their heart’s content which gives a great sense of exclusivity to their products. They value transparency — customers make orders with complete knowledge about the length of the production process. This allows them to develop great relationships with their customers while giving each order 100% care and attention.
