Just-In-Time

Just-in-time is a philosophy of manufacturing organization focusing on inventory management, pioneered by Japanese automotive industry worker Taiichi Ohno of Toyota in the early 1970s. The Japanese automotive industry as a whole widely adopted the just-in-time system to make their product more competitive by improving their product quality and corporate image. The just-in-time system also has precedents in the manufacturing process pioneered by Henry Ford at the Ford Motor Company in the first decades of the 20th century. It is also sometimes known by the terms lean manufacturing or lean production. The just-in-time system spread from the automotive industry to a wide variety of private, government, and nonprofit organizations of all sizes around the world by the 1990s, including the retail food industry. The just-in-time system also spread to include all points of a product supply chain.

In earlier times, societies would store surplus crops to survive times of bad harvests or food shortages, but in modern society, storing large amounts of food results in waste and inefficient food distribution. Inventory minimization is also critical to the food service industry because of the perishable nature of many foodstuffs, which limits the amount of time they can sit in storage before spoilage and loss of quality become issues. The added costs of inventory maintenance led food producers, distributors, retail sellers, and trade associations such as the Food Marketing Institute and the Grocery Manufacturers of America to search for newer management strategies such as just-in-time. Using the just-in-time system, food could move more quickly closer to the point of sale. The just-in-time system also appealed to large food service organizations such as restaurants that needed to receive large quantities of food that was consistent in quality to ensure a uniform retail product.

The costs associated with inventory maintenance, such as transportation and storage fees, do not add value to the company. The just-in-time management system eliminates many of these costs by reducing the amount of inventory maintained at any one time and in any one location. The just-in-time system also eliminates wasted inventory through tight control of what is needed at which location and the delivery of only those supplies or parts needed at the right moment. The just-in-time system results in smaller production lots and batch sizes, improved efficiency, better quality control, and better customer response times. Beginning with the development of the Universal Product Code in the 1970s, distribution centers and grocery stores began using food scanning technology to better forecast [Page 270]sales and control inventory. Scanning also allows the product to be traced from its origin all the way through the supply chain, improving quality control and allowing poor-quality or contaminated foods to be traced back to their source.

The food distribution system involves a supply chain that links together all steps from the farm to the table, including growers, manufacturers, distributors, retailers, and consumers. Farm products make their way to food product manufacturers, who then deliver pallets of food to wholesalers or distribution centers, where they are repackaged for delivery to grocery chains and commercial and noncommercial food service operations. Wholesale operations can be either specialized or broad line, meaning they carry whole grocery lines rather than specific categories of foods. Large retailers such as Wal-Mart, large grocery store chains such as Publix or Kroger, and large restaurant chains such as McDonald's have their own company-owned distribution centers. Some manufacturers also deliver their products directly to individual stores rather than relying on a wholesaler or distributor. Food banks that collect donated foods from multiple sources, maintain warehouses, and distribute collected foods to various soup kitchens, food pantries, shelters, and other organizations that aid the needy also use the just-in-time system. The U.S. military has adopted the system periodically to avoid wartime delays in high-priority items, including food.

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