"JIT" As A Cause of Delayed Shipments?

“Just in Time” so often gets a bad rap. People blame “JIT” for
all sorts of problems, when it’s often a problem with how JIT is
implemented instead of being a problem with the core principle of
Lean in and of itself.

At a Lean conference, a group from a company was talking through
an A3 problem solving example. The problem statement was that
customers were not getting orders in the promised timeframes.

As they went through one of their “5 Whys” analyses, one of the
“root causes” was listed simply as “JIT.”

Helping to facilitate, I probed a bit…. that didn’t sound like
a root cause yet. Why was JIT a problem?

They said that the upper managers had gotten hold of the JIT
concept and they, predictably enough, slashed inventory. They
complained that managers were suboptimizing inventory levels
(trying to keep them low) while ignoring the need to make customer
shipments. The production process was dependent on a circuit board,
shipped from a long distance away, that had highly variable quality
yields (due to the specialized nature of the product).

This is a common mistake, unfortunately, when first learning
about and implementing Lean. We hear about one aspect of Lean and
someone runs with it, without really thinking it through or
understanding the whole Lean concept.

A lesson I learned early on from a Japanese Lean sensei:

“First, keep the
line running. Second, keep inventory low.”

Instead of low inventory for low inventory’s sake, the point is
to keep inventory as low as possible while meeting the first goal
– maybe not keeping the line running precisely 100% of the time
(since that often requires a TON of inventory), but not allowing
the line to be down for hours each day.

So, one of the root causes for “JIT” being a failure mode was
really “lack of deep Lean understanding.”

Do you have examples of a situation where inventory was
intentionally cut so low that it really hurt the overall business
or prevented you from meeting customer needs?