Just-In-Time inventory
Just-In-Time inventory, also known as JIT inventory, is a strategy used by companies to optimize their inventory management by receiving goods only as they are needed in the production process. This method aims to reduce waste and improve efficiency by minimizing the amount of excess inventory that needs to be stored.
One of the key benefits of Just-In-Time inventory is that it can help companies save on storage costs and reduce the risk of inventory obsolescence. By only ordering and receiving goods when they are needed, companies can lower their carrying costs and free up capital that would otherwise be tied up in excess inventory.
However, Just-In-Time inventory also comes with its own set of challenges. Companies need to have strong relationships with their suppliers to ensure that they can quickly deliver goods when needed. They also need to have a reliable production process to avoid disruptions that could lead to delays in receiving necessary inventory.
Overall, Just-In-Time inventory can be a valuable strategy for companies looking to streamline their operations and improve their bottom line. By carefully managing their inventory levels and only ordering what is needed, companies can reduce waste, lower costs, and operate more efficiently.
- Reduces waste and improves efficiency
- Minimizes excess inventory
- Lowers storage costs
- Requires strong supplier relationships
Learn more about Just-In-Time inventory on Wikipedia.