JIT (Just in Time) production – Keep resources low, revenues high!

JIT – what it is and what does it mean for your resource management?

Just in time

Just in time – the theme of the day

Remember, that storing means losses? And those couple of lessons carried out from process optimization? Today, I will discuss matters that put these two issues in more practical sense – JIT (“Just-In-Time”) production.

The whole idea originated from Japan – this nation is quite efficient, as you probably know… More precisely from Toyota – a company you hear of a lot, when taking management classes. And even more, if you do automotive engineering as well.

This time, we focus on a smaller scale: business scale. In games, this usually means one production chain. Let’s take tanks, as an example here. JIT ideology focuses on optimizing efficiency through minimizing the amount of goods frozen in the process. If you store tank tracks, you’d better have a good reason for it, since you are effectively freezing your resources that might be invested elsewhere. Plus, there are a couple of indirect storage costs you are probably not aware of, unless you have read this article.

“Ok”, you say, “so how do I go about making it better?” Well, in the case of games it is quite simple, once you understand the issue. Try to balance supply and demand. If you need 100 tank tracks per hour, your production should be exactly that. If you produce 101 tracks – you have overpaid for your production capacity (e.g. too many factories) – unless you intend to sell the excess. If you make 99 – that’s even worse. You either decrease the efficiency of all your factories down the chain (losing potential value added by each factory), or you need an external source.

In terms of interim products, make only what you need and move it to the next manufacturing step as quickly as possible. Ideally, you should always have no more than one piece of any intermediate item between any two factories in your production chain at any time. If you are selling something, consider sale as another type of factory – one that takes resources you want to sell and makes money. You say MAKING money for a reason. It’s that simple.

Reasons for storing more

There are 3 main reasons, that justify storing more than that:

1. Logistics

In case of low value items, and high costs of transport, you should transport items in bulk. Remember, that there are many indirect costs related to transport, you might not be aware of, like the cost of security required or cost of transports lost. In fact in most cases, transport in bulk is more viable financially. Consider your bulk size carefully, having those two sides of the coin in your mind.

2. Reserves

Reserves are a loss, but often also a necessity. Since I have already covered it in the articles linked, I will focus on practical tips this time.

If you have many factories, make one (or selected few, depending on your strategic situation) your reserves deposit. The rest should be as “JIT” as possible for efficiency. This makes your reserves and logistics easier to control (similar approach, a production hub, was discussed in this article). In most cases you will not need to use your reserves in all factories at the same time.

In case you need resources in one of your factories, this might mean a lag in delivery of your reserves to the factory in question. Think of how much a (hopefully short) break in production would cost you, and how much your reserves cost you. Usually, storing reserves on-site is simply not worth it.

3. Strategic

If you are preparing for a war, you need reserves. This is one of the indirect costs of war – I will write more on that later on in the series. At any poin, no matter how good your defences are, you might lose access to your resources, one of your factories or warehouses. Think of how big the risk is, and make sure you won’t get crippled. Always plan ahead.

External sources

One more thing I’d like to discuss: external sources. If you depend on somebody else, there is always inherent risk. Consider your relations. Think of how regular the deliveries are and how good your cooperation really is. Think of goals your partner has – do you share the spoils or compete?

Civilization IV Beyond the Sword - Iron resource in danger

If I lose this iron mine, my military unit production will be screwed. What I need is a form of reserve – in this case it would be second iron mine.

Remember, that in such a case you never have actual control of your resource, as you would if you sourced it internally. It’s not just that your partner would work in bad faith (but always consider that option!). He might mess something up, triggering some war. If he loses access to resource to your common enemy, you lose it as well! He might also get a better offer – business is business, it’s not personal, as they say. Finally, your opponent might persuade your supplier to cancel trade as a part of assault preparation. Think of Civilization, iron age – how well would you fight, losing your only external iron supplier? No more troops for you, Sir!

That’s it for today. Next week will bring more military-oriented articles – make sure you subscribe to our newsletter, RSS channel and Facebook page, and share your thoughts and opinions here!

Adam “Fanatyk” Wojciechowski

About The Author

Adam "Fanatyk" Wojciechowski
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I am a co-founder, admin and manager of this site. From time to time I also write articles here. In real life, I am doing my Masters degree in Mechanical Engineering with Management at the University of Edinburgh. Besides gaming I am an avid cyclist, fountain pen enthusiast and windsurfer.

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