Talk:Just In Time (business)

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This is the talk page for discussing improvements to the Just In Time (business) article.

[edit] Procrastination

How do you people think the Just in Time strategy related to the "strategy" of procrastination? I think procrastination done right (i. e. start just in time so that you finish work by the deadline) is conceptually the same as the corresponding business strategy.

I don't know how you can procrastination be done right. The main difference between JIT and procrastination is that the former involves careful and calculated planning while the latter depends only on pure luck and come-what-may mentality.

[edit] Problems

The entire section on the problems of JIT within the oil industry needs to be fixed or deleted. First, oil production capacity has not been decreased strictly because the oil companies are believers in JIT - refineries have been shut down because they were uneconomical to operate because of regulations, redundancy, inefficiency, etc., and storage facilities cost money to operate and may make little sense given the EPA's and states' unpredictable changes in formulation requirements and the plethora of formulation "flavors". Can anyone produce any evidence that oil companies have been trying to develop JIT capability? Second, the section completely disregards the fact that because of improved performance over the past 20 years, the remaining processing facilities produce significantly more *gasoline* than they did 20 years ago (it's not the capacity that matters, it's the throughput). Third, the section overlooks the increased importation of gasoline and importance of importing gasoline instead of oil; by importing only gasoline, you don't pay for the transport of the by-products nobody wants. Fourth, the section overlooks the fact that JIT means lower costs generally, albeit possibly higher costs when the supply chain breaks down. Even Toyota runs into a crisis once in a while, but once they fix it, the system is even less costly than before. I'm for pulling it out if nobody can fix it, beginning with some evidence that Exxonmobil and others shut down capacity because of a true JIT initiative and not for other reasons (and not by using JIT as a cover story for those other reasons). Ehusman 20:55, 24 February 2006 (UTC)

I'll address your points in the order you presented them:
1 - I concede that JIT may not be the only reason these extra production facilities were removed. However, you yourself mention redundancy and inefficiency (inefficient because they are redundant?) as reasons these "extra" factories were removed. One of the major points in the Just in Time philosophy is to remove excess stock or capacity. Whether the oil companies specifically set out to follow JIT or not, they did, in effect, follow at least one of JIT's principles.
2 - The fact that the remaining facilities can produce more is irrelevent to the problem I presented. If you follow JIT by closing "extra" facilities and relocating the remaining facilities close to one another so that the flow of materials is faster, then you open your business to the risk of a localized disaster. Hurricanes Katrina and Rita are an example of such a disaster. This problem exists even if you remove oil companies from the example.
3 - Gasoline is not the only product derived from oil. There is a distinct cost benefit to having our refining facilities local. We can import one product, oil, and produce many other products.
4 - Again, irrelevant. The point of this section was to bring up problems with JIT, not to talk about the normal situations.
Further, you gloss over the seriousness of this problem, particularly with the oil companies. Hurricanes Katrina and Rita brought parts of the United States to its economic knees due to the oil shortages. This is of magnitudes more importance than any small "crisis" Toyota has on the production floor.
The causes of the problem is clear: the bulk of the refining occured in the areas the hurricanes hit and that there was no excess refining capacity. The oil companies have closed refineries and have not built any new refineries since 1976. Since they had excess capacity and JIT principles abhor excess capacity, the oil companies followed JIT by removing the excess - whether they specifically set out to follow JIT or not.
Vicissidude 18:53, 28 February 2006 (UTC)
1. The JIT philosophy is to remove excess inventory, not excess capacity to build. In fact, faster building capacity is the point of removing inventory capacity. If they have been shutting down refineries, that is not JIT, it is something completely different. Economic efficiency and JIT efficiency are different but related concepts. The fact that journalists have been calling it JIT is not the fault of the JIT community. You are calling every reduction a JIT reduction when it has little or nothing to do with JIT.
2. The fact that the remaining facilities are producing more is not irrelevant, it is the point. You are calling everything a "facility", when there is a distinct difference between storage and production facilities. They may have shut down storage facilities, but since they are producing more gasoline, they have in effect built more production capacity. Incidentally, having more production facilities on the West coast (where much if not most of the shut-downs have occurred) would not have addressed the problem posed by Katrina.
3. Having local facilities that are located closer to the customer could be JIT if it cut the production time - you are basically arguing that what you are calling JIT is not JIT. Maybe you should read a little bit about JIT theory before calling things you want to call every change in the supply chain JIT.
4. The fact that overall prices would be higher is not irrelevant if you are concerned about prices of fuel and the effect on the economy (which is evident by the text in the article). Also, there is no theory that I am aware of that would be consistently good at operating through both "normal" times and "crisis" times, so you are essentially pointing out that JIT is not perfect. If so, there is a more succinct, factually accurate, and NPOV way of doing this. Also, other derivatives of oil are also imported, but some of the by-products are not useful; by importing only the useful parts, the price of gasoline and those other products to the customer is cut.
The "seriousness" of the problem is completely irrelevant to whether or not it is a real problem attributable to the causes you claim. They have not built a new refinery since 1976 both because of regulatory issues and because it has obviously not been necessary. Obviously? Yes: The real (inflation-adjusted) cost of gasoline has gone down since then. Overbuilding is irrational. Also, why would you locate it away from the most efficient place of delivery? What you are basically arguing for is for a less efficient system to be in place all the time in order to deal with a potential temporary disruption.
You have an axe to grind, and doing it in Wikipedia is not the place. Doing it in an irrelevant forum like the JIT article is harmful. The profits of Exxon cannot be "harmful to the economy" because Exxon is part of the economy, and it wasn't their profits that were the problem: it was the disruption in supply. The disruption was caused by a hurricane. Please stop grinding your axe here - try to adhere to the NPOV requirement. Fix it or have it removed. Ehusman 13:22, 1 March 2006 (UTC)
1. You have confused excess capacity with speed of building.
Further, one of the main tenets of JIT is to remove excess inventory, regardless of the type of inventory - such as a factory. The shutting down of refineries *IS* JIT.
2. No, improved production performance has *NOTHING* to do with this problem of JIT. It makes no difference how much a group of factories can produce on a regular day if all the facilities have been moved to a single geographic area and they succumb to a localized disaster. At that point, all these facilities local to the disaster with be producing *NOTHING*.
Having more distributed production facilities, such as facilities on the west coast, WOULD have helped in the Katrina and Rita situation since those facilities WOULD continue working after the localized disaster in Louisiana and Texas.
3. Maybe you should read a book on logic or debate so you can write sentences and arguments that make sense without raising ad hominem fallacies.
4. Yes, the point of the PROBLEMS section was to point out that JIT was NOT perfect and to describe situations that it may have actual PROBLEMS with. That is WHY the section name is called PROBLEMS.
The seriousness of the problem IS relevant. If you want to debate JIT on the merits of ROI, then you need to account for the potential problems of a localized disaster. In this case, entire sections of the United States were thrown into economic chaos due to lack of gasoline supplies. Gas prices shot up $10-20 a barrel during that time and have stayed up $10 per barrel higher than before the crisis. It is unlikely that these costs were accounted for in the calculations the companies made when they shut down these facilities in the first place. When companies control critical infrastruture of a country like this, then they need to look out for the welfare of all, especially if one disaster can critically damage the economy of the entire country. This is far more important than Toyota having a parts crisis on its assembly line, like you originally wrote.
You need to address your point of view. You are not accurately assessing the risks involved with JIT in order to actively promote this business activity. I wrote that problems section to be as neutral as possible. It is you who are baised in not wanting to see ANY negative reporting of the business practise you love so dearly. That problems section is correct, accurate, nonbiased, and neutral. If you remove it, then I will only replace it. Vicissidude 07:33, 6 March 2006 (UTC)

I'm not terribly familiar with JIT so I just came here to read a bit more about it. I would very much like to see some content here about problems and challenges with implementing the Just In Time philosophy. There's some critical material already in the references section. But it's not clear to me how this Problems section is really relevant to the rest of the article without some substantiation that JIT was a driving factor in the events described and somehow faltered. These statements in particular are confusing:

In January of 2006, ExxonMobil reported the largest corporate profit ever in the history of the United States,

Doesn't this mean that JIT (if it was a factor at all) was a resounding success for those companies that implemented it?

to the detriment of the entire US economy.

This is part of the preceding sentence, suggesting a causal link between the oil companies' profits and some (unspecified) detriment to the economy, but the rest of the material gives no evidence for such a causal link.

Had companies not shut down refineries, particularly refineries on the west coast, in order to reduce capacity according to Just in Time theory, then it is likely that gasoline prices would have remained stable.

This seems highly speculative to me; are there references to support this theory? Even if there are, is this really encyclopedic content?

I've attempted to reword the section to lessen what I believe to be unsubstantiated/POV assertions. It seems that the section's author is concerned about the external impacts of a company's profit-oriented decisions, rather than the efficacy of JIT as it relates to the company's own ROI, which is the topic of the rest of the article; I respect (and might share) such concerns, but I would hope to see this distinction more clearly drawn. Ultimately this concern is not specific to JIT as a very specific concept so I'm inclined to think it's simply not appropriate in this encyclopedia article. -- Justin T. Sampson 12:28, 11 March 2006 (UTC)

Seems like fairly simple logic to me. The oil companies reduced production capacity, focusing production around the location of the Gulf Coast. The Gulf Coast then got hit by two hurricanes, partially disrupting the remaining production capacity. This supply disruption catapulted the price of gasoline, which the oil companies used to obtain record profits through price-gouging. Had these companies not limited their own production by following the practises of JIT in the first place, then it's unlikely this scenario would have played out. Vicissidude 07:09, 24 July 2006 (UTC)


I'm sorry, but the oil refineries have no place in the JIT article. It would be best if those examples were just removed and replaced with something more directly concerning miscalculations/miscommunications resulting in inventory shortages in the manufactoring supply chain. Mind 404 11:11, 6 April 2006 (UTC)

I disagree. Though Vicissidude's claims are a bit o'er the top and obviously quite bilious, the "JIT is to blame for rising oil prices" argument has been popping up for years. The argument ought to be stated here in an NPOV manner, complete with refutation if need be, to be thorough. I have been doing more research and found that even the Oil and Gas Journal covered the problem back in 1996. Ehusman 23:30, 7 April 2006 (UTC)


It may have some arcahic justification, but isn't the purpose of these articles to help explain the subject matter to the searching uniformed? Still think a clearer and more clean cut example would be more appropriate. Mind 404 04:12, 8 April 2006 (UTC)


I agree that the oil section has little, if anything, to do with JIT. Simply becasue some have argued it does not mean it should be described here in more verbage than the explaination of what JIT is. I'd either cut it way down to an FYI, or cut it completely. --Alimond 15:33, 8 May 2006 (UTC)

As a student revising for an exam including JIT, I found the example a great benefit as being something to mention/discuss.I do think that it should be far briefer in relation to the lenth of the article. --CavinGraham 17:20, 15 May (Comment added by User:129.234.4.1)

The newly revised Oil section is still far too long. From the second paragraph:

Beside the obvious point that prices went up because of the reduction in supply and not for anything to do with the practice of JIT, JIT students and even oil & gas industry analysts question whether JIT as it has been developed by Ohno, Goldratt, and others is used by the petroleum industry.
Why bring up a subject which is questioned in relation to the article when there are examples of it not working when actually implemented??
Companies routinely shut down facilities for reasons other than the application of JIT. One of those reasons may be economic rationalization: when the benefits of operating no longer outweigh the costs, including opportunity costs, the plant may be economically inefficient.
Companies also lower inventory for other reasons than JIT. Simply lowering inventory is no sign of JIT implementation. JIT is a method by which inventory is lowered.
JIT has never subscribed to such considerations directly; following Waddel and Bodek (2005), this ROI-based thinking conforms more to Brown-style accounting and Sloan management. Further, and more significantly, JIT calls for a reduction in inventory capacity, not production capacity.
Building more evidence this should be removed. This section is inexplicitly left in this article.
From 1975 to 1990 to 2005, the annual average stocks of gasoline have fallen by only 8.5% from 228,331 to 222,903 bbls to 208,986 (Energy information Administration data). Stocks fluctuate seasonally by as much as 20,000 bbls. During the 2005 hurricane season, stocks never fell below 194,000 thousand bbls, while the low for the period 1990 to 2006 was 187,017 thousand bbls in 1997. This shows that while industry storage capacity has decreased in the last 30 years, it hasn't been decimated as JIT practitioners would prefer.
Again more evidence, and decimated means to reduce by 10%, not sure the context you are looking for is destroyed, but it is certainly not decimated.

Time to remove this section completely--Alimond 05:20, 2 June 2006 (UTC)

Why bring up a subject which is questioned in relation to the article when there are examples of it not working when actually implemented??

Because people who don't know anything about JIT keep insisting that oil shocks occur because they are using JIT. It is worth pointing out that this is a commonly held but false myth.

Companies also lower inventory for other reasons than JIT. Simply lowering inventory is no sign of JIT implementation. JIT is a method by which inventory is lowered.

Yes, that was the point, but the Oil Industry JIT meme just won't die. Should an encyclopedia address memes, even if - or perhaps especially if - they are not true? Seriously. I don't know how far an article should go in debunking myths, since not all myths are equally widely held or incorrect.

Again more evidence, and decimated means to reduce by 10%, not sure the context you are looking for is destroyed, but it is certainly not decimated.

Well, more evidence that the Oil Industry JIT meme isn't true, not whether it should be removed. I said, "it hasn't been decimated", and I meant the current usage of decimated (extreme reduction), so I think maybe you misread that last bit. The point was that stocks have been reduced, but not to the levels JIT would call for.

I am convinced that the supposed application of JIT by the oil industry is a completely false myth based on the research I have done, but I am also convinced that this is a myth which will not die unless it is addressed head-on in some way. I rewrote the section to be more NPOV than it was before and believe that if it is removed, someone will simply come back and write a POV version of it (see Vicissidude's comments above, or the recent JIT=price shocks replacement last week), and we will start all over again. I believe the solution is to address it directly rather than simply ignore or dismiss it out of hand. To ignore it would be like an article about Lee Harvey Oswald without any mention of the grassy knoll or the CIA ;~). I agree that it would be better without the section at all, but that will lead to a POV rendering of it, so a short but NPOV treatment seems to be a good compromise.

From Neutral Point of View: The neutral point of view is a means of dealing with conflicting views. The policy requires that, where there are or have been conflicting views, these should be presented fairly, but not asserted. All significant points of view are presented, not just the most popular one. It should not be asserted that the most popular view or some sort of intermediate view among the different views is the correct one. Readers are left to form their own opinions.

Ehusman 21:36, 3 June 2006 (UTC)

I think we agree on the Oil industry is not using JIT, but it comes down to the place of an encyclopedia in debunking myths. I would say it's not the place of an encyclopedia.

--Alimond 18:04, 5 June 2006 (UTC)

That's an interesting point of view there Alimond. You should re-read that Neutral Point of View definition. Vicissidude 07:09, 24 July 2006 (UTC)

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