Just-Too-Late (JTL) Manufacturing

Lean Manufacturing superceded Just-In-Time, or JIT, Manufacturing in the 1990’s as a more all-encompassing methodology for many companies wishing to reduce inventory levels as well as lead times by moving to a demand-pull system from the customer end of the business.  Lean companies engage their employees in finding ways of maximising flexibility and speed of response in order to get the finished product to the customer “just in time”.  This avoids the need to stockpile and tie unnecessary cash up in the business.  It also maximises reactivity to changes in market demand. 

Fat Manufacturing businesses,  on the contrary,  push material into the front end and keep machines running flat out,  regardless of customer demand or whether the machined material is required. Inventory levels and lead times increase with products ultimately being delivered “just too late” to the customer.  Fat organisations behave in this way with the aim of increasing efficiencies and controlling costs.

Cost reduction in Just-Too-Late Manufacturing

Cost reduction in a Just-Too-Late Manufacturing environment is about reducing labour levels,  keeping the remaining labour resource busy on anything and everything,  especially the 8 wastes,  and buying the cheapest raw materials from a range of relatively unknown and distant suppliers, with long lead times.  This results in huge and immediate paper cost savings,  celebrated by the company accountants and upper management,  as the manufacturing quality and delivery performance targets are repeatedly missed and customers become increasingly dissatisfied.  The late delivery penalties,  loss of business and diminished cash flow from the high inventory and longer lead times cause costs to paradoxically increase following the initial paper saving,  thus reinforcing the need for management to focus on reducing costs.  The cycle begins again usually by reducing head count further and seeking even cheaper raw materials.