A theoretical framework for understanding why JIT reduces cost and cycle time and improves quality

From the point of view of production planning and control the basic building blocks in the classic Just-In-Time production system are (1) a pull control system, (2) move and production kanban, (3) a level schedule, and (4) enforced waste identification and removal through controlled reductions in inventory. There is considerable empirical evidence showing that where JIT has been successfully implemented, substantial reduction in cost, cycle time, and inventory along with significant improvements in quality have resulted. In this paper a mathematical framework, which models the classic JIT production system, is presented. Analysis of this mathematical model shows precisely how JIT gives improvements in cost, cycle time, inventory and quality. The model permits the extent of the improvements to be determined. One of the more interesting results of the analysis is the following. Move kanban have virtually no effect on any improvements to cost. Consequently a simpler JIT production system employing only one type of kanban may be preferred to the classical JIT system with production and move kanban. A mathematical model of the single kanban JIT system is also analyzed.