What is "Just-in-Time (JIT)" meaning?

Just-in-Time (JIT) is an inventory management strategy that aims to reduce inventory holding costs by producing and receiving goods only as they are needed in the production process. This method helps companies reduce waste and improve operational efficiency.

Example

"By adopting a Just-in-Time system, the car manufacturer reduced its storage costs and improved its production speed, ensuring parts were delivered exactly when needed."

How is "Just-in-Time (JIT)" used in business?

In business, JIT is typically used in manufacturing and retail to streamline operations. It minimizes the need for warehouses, reduces the risk of overstocking, and improves cash flow by lowering inventory costs.

Pro Tip

Implementing a JIT system requires strong supplier relationships and precise demand forecasting to avoid production delays or shortages.