Get to know the vital terms of Logistics and Supply Chain Management.
Just-In-Time (JIT) Inventory Control is a strategic approach in the supply chain management of providing materials and components to manufacturing or assembly facilities just as they are needed. Thus, this system balances supplies with demand, minimizing stock requirements by delivering materials in smaller, more frequent consignments, thereby keeping storage costs low and operations efficient.
JIT reduces stockouts since the delivery is designed based on the real-time needs of the production system. It eventually reduces space for keeping goods and thereby reduces the holding cost.
While the make-to-stock system produces the goods considering demand, JIT is based on the pull-type system that is the supply which is driven by actual demand, thus averting the chance of creating excess, which means waste.
The JIT system demands frequent deliveries of small quantities in a manner that the materials only arrive when they are needed to avoid obsolescence or surplus stock.
Suppliers have to be well co-coordinated in a JIT system because success depends upon the deliveries received within the schedule. Thus, it enhances production without permitting delays in time schedules.
The JIT stock control method is meant to have spare parts arrive precisely at the production time to make it quite effective. Nowadays, many sectors have copied this process as it cuts down unnecessary processes, expenses, and productivity.
The JIT inventory control systems are indeed useful for businesses that aim to waste less, cost less, and produce on demand. Using delivery and supply chain coordination, JIT enables the rapid response of a company to customer’s needs with an efficient, low-cost production process.