Just in Time Inventory (JIT) is a management strategy that increases efficiency and decreases waste by producing goods when there is demand and by this means reducing inventory costs. This managing inventory system has gained its popularity in early 21st century while suppliers and retailers worked together to control inventory costs and simultaneously met the demands of the customers. JIT is a simple idea, but it plays an essential role in the modern supply chain management. JIT was put in practice to cut the costs by reducing the amount of goods production and materials, which are bulk in stock.
JIT - The Definition
Just In Time is the principle which materials are delivered in right time and in right quantities based on the point of use. JIT’s main objective is to lessen the waste related to inventory; products should be delivered in right time and produced in ‘Just In Time’. A stock should be created or purchased, only when required. There are a wide range of wastes related to inventory for example storing the goods when not required and management resources. JIT’s aims to deliver the material right on time, in the right place, and in the correct quantity.