What is just in time

The Just in Time, literally means “just in time” and is a production system that involves manufacturing products based on market demand.

It is an inventory management method aimed at containing the waste that can occur with the purchase of goods and materials based on market demands.

When you do not anticipate production, therefore, you do not accumulate excess inventory there is consequently a reduction in costs.

The just in time inventory management requires great coordination between producers and suppliers because supplies arrive at their destination only when they need to be ready for resale.

How Just in Time is applied 

The Just in Time has two objectives: optimization of management and reduction of waste.

The just in time model must meet certain requirements:

• Smooth and constant flow of information: that is, the coordination between suppliers, manufacturers, and customers;
• Giving priority to the supplier: putting the purchase of large quantities of products on the back burner.

Having a minimum level of stock allows working based on demand but not being entirely dependent on it.

Advantages of Just in Time

The Just in Time model offers several advantages to businesses: 

• Reduces storage costs: if you produce only what is strictly necessary, it reduces goods in stock and decreases related costs;
• Reduces the risk of product obsolescence: if you always work with low levels of stock;
• Gives companies greater capacity to react: to cope with market demand variability.

Therefore, to implement Just in Time, it is necessary to understand the company's goals, consumer needs, and have the main requirements to avoid wasting excess goods.