The Institute for Manufacturing at the University of Cambridge in England made the following comment regarding just in time: The technique is only advantageous for the company when the reduced warehouse costs more than make up for the lost purchasing economies of scale from the bulk-buying of components and raw materials and more frequent deliveries. Just in time inventory management involves keeping stocks to a minimum at all times. The supplies go straight to the factory floor, where production occurs. They wait for a customer’s order to come in before making the finished product.Īs this image shows, as soon as the inventory manager gets an order, she makes sure the suppliers are informed. Make-to-stock has a similar meaning to just-in-case.Ĭompanies that follow a make-to-order manufacturing system have minimum stock levels. Companies use Just-in-Case because they do not want to run out of stock. This system contrasts with ‘Just-in-Case,’ an inventory management strategy that businesses use when they store huge amounts of inventory. The producer subsequently takes them to the factory floor immediately. Rather than occasional major deliveries to a warehouse, in a just in time system supplies arrive only when the company asks for them. They must arrive the moment the company requests them. Instead, it relies on the prompt deliveries of components and raw materials. With ‘just in time,’ a company holds virtually no stocks. Businesses can switch to an alternative method of stock control which minimizes spending and boosts competitiveness. It is an inventory system that does away with large stocks.

Just in Time is often referred to as Just in Time Manufacturing, Just in Time Production, Just in Time Inventory Management, Lean Manufacturing, Stockless Production, or the Toyota Production System.