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Scheduling a manufacturing system can be one of the most complex tasks in managing an operation. Planning and control systems such as just in time (JIT) can aid scheduling. However, planning and control tools require a fairly stable shopfloor environment to get the best out of them. Many system designs and schedules only consider 100 per cent reliability in machines, and do not take into account random interruptions. In this paper, a simulation model was created to investigate machine and material handling system breakdown problems in a JIT‐driven flexible manufacturing system. Results show that compromises have to be made with JIT control in order to get the best system performance.