Efficiency and Accuracy Just-in-time (JIT) manufacturing, involves a production process that operates solely on customer demand.

In traditional manufacturing, goods are produced, assembled and stored based on a companys estimate of market demand. In JIT manufacturing, the production process begins at the time an order for goods is received. As we know the definition of Just In Time is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires that producers are able to accurately forecast demand. Especially in a car manufacturer that operates with very low inventory levels, relying on their supply chain to deliver the parts they need to build cars. The parts needed to manufacture the cars do not arrive before nor after they are needed, rather do they arrive just as they are needed. This inventory supply system represents a shift away from the older "just in case" strategy where producers carried large inventories in case higher demand had to be met. JIT manufacturing reduces company inventory costs because inventory is acquired upon customer demand. This relieves the financial burden of stocking inventory for future use, reduces the need for expansive storage solutions, and reduces the risk of maintaining stock that expires or becomes out-dated. The notion of JIT production was described by Taiichi Ohno, the godfather of Toyota production system, as All we are doing at the time line from the moment the customer gives us an order to the point when we collect the cash, and we are reducing that time line by removing the nonvalue-added wastes (Liker, 2004). Nonvalue-added here means that we should take care of the costs that involved in the manufactured car. The company has to do and estimate an accurate cost in producing car. That why all of car Manufacture Company applied value engineering technique to align target cost and perceive value. Value engineering is the systematic, interdisciplinary examination of factors effecting costs to devise a means of achieving cost, quality and functionality at the target cost.

Others, there are also able to accurately forecast demand of the product which is the market demand. Relating to the cases in Mercedes Benz M-Class they are also has doing the function groups contribute the most important categories. This is meant the company also doing research the need of customer towards their products. Therefore, they will know what kind of part in car that most important and they can prepare all the materials before, after or during the processing in making car. With make an accurately estimate the costs involves in manufactures car it will make the process of the manufacture car become more efficient. As the result company can produce a high quality of car. Therefore, as the definition in first paragraph Just in In Time is more refer to the management of inventory. In manufacturing we know that the most importance thing is the management of inventory this is because Just In Time are used to make the production with the effective costs. To have an effective cost we need to make sure the inventory needed for the production with manage the inventory well, where the management should know when the need of the inventory supply. Kaplan and Atkinson (1989) revealed that the JIT philosophy revolves around four major points: the elimination of activities that do not add value to a product 26 PAMIJ 12, 2 2007 or service; a commitment to a high level of quality; a commitment to continuous improvement in the efficiency of an activity; and an emphasis on simplification and increased visibility to identify activities that do not add value. Furthermore, JIT manufacturing allows companies to utilize cash for other operating expenses because the necessity of maintaining stored inventory levels is eliminated. The benefit of not restricting cash flow to inventory allocations increases efficiency reduces capital expenditures and secures a competitive advantage for the business. Besides that, under current costing systems, fixed overhead recovery is based on machine or direct labor hours. This allocation encourages the company to produce as much as possible in order to recover all of its overhead. Also, manufacturing plants tend to organize production processes into cost centers. These cost centers strive to increase their own production goals, and they are not concerned if defective items are passed on to other departments. Both of these factors go against JIT goals. JIT systems also attempt to simplify accounting procedures.

A negative aspect to JIT manufacturing is the stress on-demand production places on equipment. Under normal operating conditions, machines are used systematically and controlled to operate with set production requirements. This allows mechanics and operators regular time to perform system checks and repair any deficiencies in the equipment. JIT manufacturing does not present an opportunity for routine equipment processes, as it is often impossible to predict when orders will be demanded and the quantity of items that must be produced. Then, in reducing the costs involved the company should maximize space. The time employees spend walking from one area to another every day decreases the efficiency levels of the manufacturing process. Cut back on the amount of steps your employees take each day by putting commonly used equipment and machines closer together or reorganizing the job functions of the employees. JIT was highly needed especially in the automotive industry thats why Toyota was the first company to use it. In order to have an efficient production system in the automotive industry, there were many issues that needed to be solved. The main problem was that the automotive industry is a typical mass production assembly type where each vehicle is assembled from several thousand parts that have undergone numerous processes. On the other hand, it can easily fall into the condition of having excessive equipment and surplus of workers, which is not conformable to Toyotas' recognition. In order to avoid such problems as inventory unbalance and surplus equipment and workers, Toyota recognized necessity of schemes adjustable to conform to changes due to troubles and demand fluctuations.