Just In Time (JIT)

Goods are produced to order so stock levels are minimal

Keeping low stock levels decreases the costs of storing them helping to increase profits

This increases the flexibility of a firm

It helps reduce waste as you only use what you need

For JIT to be effective you need the following:

- Excellent supplier relationships – need the supplies to arrive at exactly the right time

- Reliable employees – or stoppages may occur

- A flexible workforce – need them to be able to work any time and any where

Advantages

Increased focus on quality

Costs are reduced:

- Warehousing

- Security and insurance

- Opportunity

Disadvantages

May be difficult to meet unexpected major increases in demand

Can be problems caused by suppliers

Loss of discounts for buying in bulk