Just-in-Time (JIT)
Also known as: JIT, JIT Inventory, JIT Delivery
Definition
Just-in-Time is a production and inventory strategy where goods arrive precisely when needed—not before, not after. It eliminates warehousing costs but requires extremely reliable shipping.
How JIT Works
| Traditional | Just-in-Time |
|---|---|
| Large inventory buffers | Minimal stock |
| Order in bulk | Frequent small orders |
| Warehouse storage | Direct to production |
| Safety stock | Precise timing |
JIT Requirements
Reliable transportation:
- On-time delivery critical
- Consistent transit times
- Backup carriers ready
- Real-time visibility
Strong supplier relationships:
- Frequent communication
- Quality consistency
- Flexible capacity
- Geographic proximity helps
JIT Benefits
- Reduced inventory costs
- Less warehouse space needed
- Lower working capital
- Fresher products
- Less obsolescence
- Quality issues caught quickly
JIT Risks
- Supply chain disruption vulnerability
- No buffer for demand spikes
- Carrier delays costly
- Requires perfect coordination
- Weather/disaster exposure
JIT in Practice
Automotive: Parts arrive at assembly line as needed Retail: Replenishment matches sales Manufacturing: Components timed to production schedule
JIT vs. Just-in-Case
After supply chain disruptions (2020+), many companies shifted to “just-in-case” with more safety stock, balancing efficiency with resilience.
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