Final answer:
JIT philosophy eliminates work-in-process inventory to achieve savings in capital requirements and to enhance quality control, leading to more efficient production systems.
Step-by-step explanation:
The JIT (Just-In-Time) philosophy aims to eliminate work-in-process inventory primarily because it can lead to significant savings in capital requirements. This elimination is strategic because inventory not only requires space and induces holding costs, but it also ties up capital that could be used more efficiently elsewhere within the business operations. When parts are delivered as needed, rather than being stored for future use, companies, such as car manufacturers, avoid the unnecessary costs of warehousing and reduce the financial risk associated with holding large quantities of inventory.
Quality control is also enhanced under JIT systems. With a focus on immediate delivery, any issues with parts can be detected quickly, and necessary actions can be taken to rectify problems before they escalate. This approach demands tight coordination with suppliers and often leads to the establishment of numerous sub-assembly plants near the main assembly plants to facilitate the timely delivery of parts. Thus, JIT not only contributes to lower costs but also to a more responsive and efficient production system.