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Just In Time Inventory Management

Just in time handle inventory, in this technique the raw material is produced when it is needed. The essence to this type of system is efficient communication, via which information is given to the production department about the depletion of inventory. So by applying this method organizations can accelerate their efficiency as they won’t have to carry access inventory. All a company has to do is alert the respective production department that they are out of raw material and then they will get it in no time.

By applying this methodology a company can also increase the return it gets from its capital. Another advantage that can be added to the list is that in a JIT system the emplo...

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...yees are better utilized, they work only when they are needed and because they always have deadlines to worry about, their job becomes more challenging and exciting, which hence increases the satisfaction they get from the job. The employees tend to become more flexible because they have more power to make key decisions.

Moreover the company has less capital engaged in inventory which is just stockpiled in their warehouses. By using the JIT system the wastage is decreased and the productivity is increased. This approach aims to manufacture the inventory needed at the time it is needed and after that delivering it to the place it is required. Along with it strengths of JIT it also has some weaknesses, like the fact that the system is very inter-reliant, you might think that I made a mistake to consider this as a disadvantage but when ever there is a problem in one place it affect the whole system.

This is indeed a disadvantage. Incase of unforeseen situations like lockouts, demand variations, strikes, etc a problem is seem to arise. In times of emergencies the lack of inventory can be a huge problem which might even cause a halt in the supply chain. Technology can also be used alongside with JIT systems but doing so will increase cost and one has to keep this in mind that a collapse in the system can occur at any point in time and thus should be prepared for the worst.

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