Point-of-Use Manufacture

This approach is closely associated to JIT but this is applied inside a company.

Point-of-Use manufacture means that the workstations making the components are situated along the assembly line instantly before the assembly operations they serve. In this way, the components flow directly into the assembly stations. It substantially reduces the amount of work-in-process & time delay. The risk suffered by the company is that one of the component manufacture operations shall fail and cause the whole assembly line shut down. To decrease this risk, a small "float" of parts is generally maintained among the workstation that makes the parts and the workstation that assembles them.

Pressure to Reduce Inventories

Throughout the late 70s and throughout much of the 80s, interest rates enhanced to historic levels. Companies realized that there was a very high investment cost related with keeping inventories. Attempts were made to reduce inventories of all kinds. In manufacturing the focus was on dropping work-in-process.