What does "just-in-time" (JIT) inventory management aim to accomplish?

Just-in-time (JIT) inventory management is a strategy focused on minimizing inventory levels by receiving goods only as they are needed in the production process. The primary goal of JIT is to improve a company's return on investment by reducing carrying costs tied to excess stock. By coordinating production schedules with supplier deliveries, businesses can avoid overstocking, reduce waste, and enhance operational efficiency.

This approach leads to more streamlined operations, as products move through the supply chain quickly without the delays caused by holding large quantities of inventory. JIT requires careful planning, reliable suppliers, and effective communication, as companies must accurately predict their inventory needs while minimizing delays in the supply chain. The outcome is a more responsive production system that aligns closely with actual demand, allowing for better resource allocation and reduced costs associated with storage and unsold goods.