They don't have to be in the same location. However the farther you are from the site of production the more product needed in queue. Toyota stocks the parts bin on the assembly line from a warehouse on site. The warehouse is stocked less often than the parts bins. Depending on how long it takes to get an order the warehouse has more of some parts than others. Toyota also has extra parts as risk management where they determine that there is a high risk of the part not being available to order. Toyota also shares their order predictions with suppliers well in advance so the supplier can plan ahead what they need to deliver. Toyota also knows their supply chain 6+ level deep, if mine workers go on strike they prepare backup plans for 6 months out. Toyota also does a lot of other things that I'm not aware of to ensure that when they need something it arrives, not a moment sooner or latter.
Toyota isn't the only company that does this. If you supply Toyota they require you to do this in some form, including making your suppliers do it. (this is part of knowing their suppliers 6 levels deep - something they also do to ensure they don't use slave/child labor even indirectly). There are other companies that don't supply Toyota that have also taken this same lesson.
The point is just in time is hard to do right. The simple elevator pitch has many obvious problems that those who do it are careful about ensuring they don't happen.
Toyota isn't the only company that does this. If you supply Toyota they require you to do this in some form, including making your suppliers do it. (this is part of knowing their suppliers 6 levels deep - something they also do to ensure they don't use slave/child labor even indirectly). There are other companies that don't supply Toyota that have also taken this same lesson.
The point is just in time is hard to do right. The simple elevator pitch has many obvious problems that those who do it are careful about ensuring they don't happen.