In contrast, JIT production is a “demand-pull” approach, which is used by companies such as Toyota in the automobile industry, Acer in the computer industry, and Miele in the appliance industry. Just-in-time (JIT) production, which is also called lean production, is a “demand-pull” manufacturing system that manufactures each component in a production line as soon as, and only when, needed by the next step in the production line. Demand triggers each step of the production process, starting with customer demand for a finished product at the end of the process and working all the way back to the demand for direct materials at the beginning of the process. In this way, demand pulls an order through the production line. The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods, despite low quantities of inventory. JIT production systems help companies meet the demand for high-quality products on time and at the lowest possible cost.
As customer information systems get increasingly sophisticated and computing power allows companies to process and analyze large quantities of data at rapid speed, companies are able to develop deep insights into the needs of customers. As a result, many companies are combining the best features of MRP and JIT systems—anticipating demand changes to some extent but continuing to operate flexible production systems to quickly respond to fluctuations in demand.