What is it?
An inventory management strategy to increase efficiency and decrease waste by receiving goods only as they are needed.
How does it work?
Just-in-Time (JIT) Inventory is an inventory management strategy that aims to increase efficiency and decrease waste in a production process. The strategy involves receiving goods only as they are needed for the production process, thereby reducing inventory costs and waste.
When is it useful?
In a practical business context, JIT inventory management is applied to reduce the costs associated with holding and storing inventory. Businesses coordinate with their suppliers to ensure goods are delivered exactly when they are needed for production. This reduces the need for large storage spaces and minimizes the risk of goods becoming obsolete or spoiling before they are used.
Real-World Impact
A good example of JIT inventory management is Toyota. The Japanese automaker implemented JIT in its manufacturing process to reduce the waste of storing large amounts of inventory. Toyota coordinates closely with its suppliers to ensure parts are delivered exactly when they are needed for assembly. This has resulted in significant cost savings and improved efficiency in Toyota’s production process.
How to Get Started
Understanding JIT inventory management can be beneficial for businesses using Empress’s suite of tools and services to enhance their operations. Empress provides tools that support efficient inventory management, including the ability to track and monitor inventory levels in real-time. This allows businesses to implement JIT strategies effectively, reducing costs and increasing efficiency.
Get the Empress Edge
Implementing a JIT inventory management strategy requires a high level of coordination with suppliers and a deep understanding of the production process. But when implemented effectively, JIT can lead to significant cost savings and improvements in efficiency. Additionally, JIT is a key component of lean manufacturing, a methodology aimed at reducing waste and improving efficiency in manufacturing processes.