JUST IN TIME

A system of supplying goods as close as possible to when they are actually needed.

For manufacturing company, raw materials arrived just before they are added to the final product.

Keeping less inventory on hand means a company has more available cash and credit for other uses.

JIT requires the constant and precise monitoring of demand. This is done with the use of “KANBAN” signals between various points of production which can alert when the next part or product is needed.

For manufacturers: underestimation

Underestimation is the main problem- less profit- without necessary materials, production stops and the manufacturer is unable to deliver goods as promised