What is all the hype about just in time inventory?

I would like to start off this article by talking about what Just In Time is notit is not a magic bullet. It isn’t one thing that you do that will suddenly fix all of your problems. In fact, just in time is a broad term that encompasses all parts of your operations and continually working to make each piece better. This may seem a little disappointing, yet at the same time this is the reason “just in time” has been around long enough to become more than just another management fad.

What Just In Time actually is:

Just in time production strategy is a method of dealing with the two main goals of Inventory Management that are discussed all over this website:

  • Minimizing Inventory Carrying Costs
  • Maximizing Service Levels

Note: If you haven’t already I recommend checking out our article “What is Inventory Management?” to get a good idea about these two goals and what they mean.

So how does Just In Time (JIT) actually actually help achieve these two goals? It does so by employing several methods which are:

  1. Making supply match demand to reduce inventory
  2. Using signals such as Kanbanto communicate between stages of a process
  3. Increasing employee involvement
  4. Continuous Improvement

So the inevitable next question is, “how do I go about implementing a just in time inventory system?” There are 7 major areas of just in time and you need to implement them all to for the system to work. They are:

  1. Improving flow process design
  2. Total quality control
  3. Stabilizing the schedule
  4. Creating a Kanban pull system
  5. Working with vendors
  6. Reducing inventory
  7. Improving the product design

Each one of these seven areas is its own topic of operations management and deserves careful study and implementation. As you can see just in time isn’t a quick fix process and can take a serious investment in time and resources to accomplish. However the benefits of JIT cannot be underestimated. I recommend if your business deals with inventory and you want to move to a just in time system it may be worth it to look into consulting firms and find a inventory management consultant.

One possibility is to also purchase an inventory management software system that utilizes the basics of Just In Time inventory. This can save you a lot of headaches down the road if your organization tries to implement a JIT system. Check out our reviews of inventory management software systems in this article:

Top 10 Inventory Management Software Systems

If you however haven’t been scared away by some or all of the terms in this short introduction to just in time inventory, I recommend picking up one of the following books that will go much deeper into the process. Keep in mind that unless you can get your entire business behind the idea of moving to a JIT system, it will likely fail.

Understanding the Obsolete inventory management as well finding inventory buyers you need to understand the how to manage inventory system.