What is Just-in-Time (JIT) Inventory Management?

Just-in-Time inventory, commonly referred to as JIT, is an inventory management strategy that aligns raw material delivery to specific production cycles so that materials arrive as production is scheduled, but no sooner. This ensures there is only enough stock to produce what’s needed, when it’s needed, with the goal of achieving high-volume production with minimal inventory on-hand and eliminating waste. A Just-in-Time strategy works well for businesses that use a make-to-order model.

However, keeping just enough product on hand means a business may not be able to meet unexpected demand. Therefore, businesses using a just-in-time strategy need to meticulously plan their production processes, fine tune visibility into their supply chain and ensure demand forecasting is accurate. Done successfully, Just-in-Time inventory strategies lower inventory costs, minimize warehouse needs, improve efficiencies, and decrease waste--all of which help to increase business profitability.