Managerial accounting Essay Example | Topics and Well Written Essays - 1250 words

Managerial accounting - Essay Example Following which it will be discussed how the company has implemented this strategy in the day – to – day working. As mentioned earlier JIT was firstly introduced by Henry Ford and was clearly described in his book ‘My Life and Work’ in 1923. It was then that Henry Ford had realised that inventory stocking was a waste of investments in terms of the amount locked up in forms of inventory as well as storage and transportation costs. The JIT process is simple and defines stocking of goods to be a waste. Companies using this method follow the thumb rule of ordering for stocks whenever it is required by the company. This process exposes the hidden costs that the company incurs for storing and transporting of the inventories. The process might seem simple however when it comes to incorporating it into the daily business, the companies face a number of issues as it would mean completely changing the process flow of the company. There are a number of different disciplines that are followed to ensure the correct timing for ordering the goods to fit in correctly into the process flow of the company. This process involves aspects of statistics, behavioural science, production management and industrial engineering. In simple terms JIT is a process ensures that the inventories of a company are available at the right time, at the right place, the right amounts and finally the right materials (Sandras, 1989). Toyota is one of biggest motor company in the world. The company has been existent from times before the first ever air conditioner, colour television and even the first ever cheese burger was invented. It was started way back in 1934, where the first engine was produced by the company. It was later in 1935 that the first car was produced. In 1937 the company was split off. The company’s production was very limited between the years of 1936 -1945. The company however picked up motion in 1945 and the production was seen to grow rapidly since then.