Just In Time Inventory Management

admin April 21, 2023 0 Comments

Just in Time Inventory Management, No one disagrees on the extent of the importance of inventory as one of the most important pillars of the production process within the company, in addition to being one of the most important elements of the financial position, but it should be noted that the methods of inventory management are always in constant development and updating because of this element of great importance for companies.

So all companies always harness modern technology in order to improve the methods of inventory management in order to manage the stores as accurately as possible and in the fastest time and with the least effort.

And this is the difficult equation that all companies seek to achieve, and in this article on LOGSTIAT logistics solutions we will show you one of the modern methods of inventory management, which is Just in Time Inventory Management.

What is inventory management?

Before talking about Just in time meaning, we will first need to know what is meant by inventory management. Inventory management refers to the process of ordering, storing, and using a company’s inventory.

This includes managing raw materials, components, and finished products, as well as storing and processing these items.

Just in time meaning (JIT)


The company uses different methods of inventory management, depending on the type of business or product being analyzed, and one of the best inventory management methods is the just in time (JIT) method.

As for the meaning of just in time (JIT), it is one of the methods of inventory management, which is the process of ordering and receiving inventory for production as required.

This means that the company does not have safety inventory and operates with low inventory levels, this strategy helps companies reduce their carrying costs by increasing efficiency and reducing unnecessary costs.

Importance of just-in-time


The Just-in-Time (JIT) method was introduced by Taichi Ono, the founder of the Toyota Global Group, Ono created this method when he noticed the increase in the number of production lines,

That depends on the manufacture of a large amount of one product before moving to the production of another product and the increasing focus of demand on the degree of product diversity rather than the quantity produced.

The just in time (JIT) method is very important as it is one of the best inventory management strategies, as it:

1. Reduces inventory waste

As the just in time (JIT) method reduces the damaged products, through the procurement department requesting the appropriate quantities of raw materials that you need in the production process.

Thus, there is no surplus or deficit in the stock, it allows companies to save significant amounts of money and reduce waste by keeping only the inventory they need to produce and sell products.

2. Decreases warehouse holding cost

As the just in time (JIT) method provides the right items to the production department at the right time and with the required quality, making the stock quantity reach zero.

The Just in Time Inventory management approach reduces storage and insurance costs, as well as the cost of liquidating or disposing of excess inventory.

Advantages of JIT Inventory

Just-in-time inventory management has many advantages that distinguish it from other inventory management methods, as:

  • Its production processes are short; which means manufacturers can move from one product to the next quickly
  • Reduce costs by reducing the need for warehouses.
  • Promote continuous improvement in the production process.
  • Increase efficiency.
  • Reduce money spent on raw materials, as it allows companies to spend less money on raw materials; because it only buys the resources you need to fulfill confirmed orders and nothing more.

Disadvantages of JIT Inventory

In addition to the many advantages that distinguish just-in-time inventory management from other inventory management methods, there are a number of disadvantages as:

  • Possible disruptions in the supply chain, if a raw material supplier encounters a problem and cannot deliver goods on time; this may disrupt the entire production process.
  • Sudden unexpected demand for goods may delay delivery of finished products to customers. You can organize all this through Delivery Management System.

JIT system


Just in Time (JIT) system is a management strategy that reduces inventory and increases efficiency, and the success of a “just in time” production process depends on stable production, quality craftsmanship, zero machine downtime, and reliable suppliers.

Just-in-time inventory management systems reduce production costs; because manufacturers don’t have to pay for inventory storage, they don’t have unwanted stock left if an order is canceled or not met.

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