{"id":10927,"date":"2021-04-02T19:35:19","date_gmt":"2021-04-02T11:35:19","guid":{"rendered":"https:\/\/zhenhub.com\/?p=10927"},"modified":"2022-10-07T18:24:23","modified_gmt":"2022-10-07T10:24:23","slug":"just-in-time-inventory","status":"publish","type":"post","link":"https:\/\/zhenhub.com\/blog\/just-in-time-inventory\/","title":{"rendered":"Just-in-Time Inventory (JIT): Everything You Need to Know"},"content":{"rendered":"\n

eCommerce will get bigger and bigger. More than 3 billion packages got delivered during the 2020 holidays<\/a>, and billions of people made online transactions for several years. While these numbers are good for the global economy, it does pose several challenges, one of which is inventory management.\u00a0<\/p>\n\n\n\n

That\u2019s why it\u2019s essential to find the balance between overstocking and understocking requires a level of finesse. Too much inventory in stock can affect your bottom line; likewise, light inventory levels can affect order fulfillment time<\/a>. For many businesses, online or otherwise, shifting to a Just-in-Time inventory management system improved their supply chain and reduced inventory management costs.\u00a0<\/p>\n\n\n\n

What is <\/strong>Just-in-Time Inventory<\/strong>?<\/strong><\/h2>\n\n\n\n

Just-in-Time inventory management, or JIT, is a type of inventory management strategy that aims to reach maximum efficiency while lowering costs. It is a lean management framework that involves ordering and receiving the merchandise for order fulfillment only as needed. <\/p>\n\n\n\n

Businesses that operate on a JIT inventory management strategy do not often carry plenty of products in stock. Because they do not hold safety stock, they invest in accurate demand forecasting for their products. <\/p>\n\n\n\n

History of <\/strong>Just-in-Time Inventory<\/strong><\/h2>\n\n\n\n

JIT has been around for years. It was developed in post-war Japan in the 1970s<\/a> to solve the imbalance between the scarcity of resources, space, and cash and the increasing demands for consumer products. Automobile manufacturer Toyota originally developed JIT inventory management.\u00a0<\/p>\n\n\n\n

How Does <\/strong>Just-in-Time Inventory<\/strong> Work?<\/strong><\/h2>\n\n\n\n

One of the goals of the JIT framework is to improve itself continually. As an example of that, early adopter Toyota, took 15 years to perfect their process. <\/p>\n\n\n\n

The JIT process involves sourcing inventory or raw materials when an order comes in or when demand for a product is forecasted. \u201cPull triggers\u201d determine when a new shipment is due to be shipped from the supplier or manufacturer. That said, the JIT inventory management cycle can come in many forms. However, below are the processes that most retailers do when  they utilize practice this lean management strategy: <\/p>\n\n\n\n