Just-In-Time Inventory Management: Advantages & Disadvantages

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• Although the history of JIT traces back to Henry Ford, the American businessman who applied similar principles to manage inventory in the Ford automobile company during the early part of the 20th Century, the origins of JIT as a management strategy track down to Taiichi Ohno of the Toyota manufacturing company.

• How Does Just In Time Work?

• JIT inventory management ensures that stock arrives as needed for production or to meet consumer demand, not earlier. The goal is to eliminate waste and increase the efficiency of business operations.  Since the main objective is often quality and not the lowest price, JIT requires long-term contracts with reliable suppliers. In JIT, the parts of the production or service system are interconnected. These systems exchange information and are mutually dependent on generating successful outcomes. It is a continuous improvement process aiming to streamline the business strategy. For a successful just-in-time model, a business needs the following: Steady & consistent production Reliable material suppliers Quality systems that work without any fail AI-driven accurate demand forecasting  Due to this type of inventory management, businesses require robust network connectivity along with Artificial Intelligence, machine learning, Internet of Things, cloud E

• e just-in-time process aims to reduce waste and improve quality, the strategy goes through an 8-step cyclic process for continuous improvement.