What is Just-In-Time Inventory, and why do you need it?

If you’ve never heard the term Just-In-Time Inventory, it’s just as it sounds — an inventory strategy that companies use to increase efficiency and decrease waste by receiving goods only as needed during production.

This system represents a complete shift in older strategies when manufacturers and producers would house larger inventories “just-in-case” there was a higher demand than expected.

In both cases (and in most inventory strategies) these production facilities are relying heavily on accurate demand forecasts. Some companies are better than others at correctly projecting the amount of product they will need, but nearly all of them have experienced a situation at one time or another where the count was off. That could be a costly mistake.

That’s why at SUPPLY POINTe we encourage all of our manufacturing partners to adopt the Just-In-Time Inventory strategy.

One of the biggest advantages we see in this production shift is the savings they can accumulate in storage and waste. Because these companies are only making enough product as needed, production times are short and concise. Manufacturers are also able to move from one product to another much easier because of the optimization of their system.

Plus, by only purchasing enough raw materials for the current project, companies are seeing a significant lack of unused materials and therefore, lower waste costs.

Of course, like any manufacturing strategy Just-In-Time Inventory can have disadvantages too. The largest concern our partner companies experience is a lack of trust that material suppliers won’t arrive on time. Thankfully for those companies, they’ve signed on with SUPPLY POINTe and have seen the difference it can make.

Contact us today to find out how we can optimize your inventory control strategy, and why you should give the just-in-time model a try.

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