JIT Inventory Management Strategy

Abstract

Implementing a just-in-time (JIT) inventory management strategy seems to be the latest hot topic in the business world, particularly in manufacturing industries. In today's competitive supply chain environment, more and more companies are either adopting JIT methodology or at least beginning to research and understand how JIT would affect their business. But what exactly is JIT? Many companies may be already putting into practice some of the concepts of JIT – such as looking at always improving or trying to reduce waste in terms of product or labor steps. Some companies may be fully ready to embrace a JIT operating process; yet, perhaps JIT is not the best choice for their business. The goal of this chapter is to develop a better understanding of JIT, from this history behind its inception to the various risks and benefits that relate to adopting JIT from an interdisciplinary/strategic approach to a transdisciplinary viewpoint. Those strategies, which include the basic methods of minimum stock, economic order quantity (EOQ), and Safety stock methods, are explored and explained in this chapter.