Just-in-Time (JIT) | Shipping Term Explained | Logistics Glossary
GLOSSARY
Just-in-time
Just-in-time (JIT) is an inventory management strategy that consists in aligning the supply of goods and raw materials with the production schedule.
What are the advantages of Just-in-time?
Just-in-time is a stock and inventory management method to reduce inventory, storage and handling costs at the minimum. Companies use this method to receive goods as they need them.
Advantages of JIT:
- reduced warehouse costs;
- reduced obsolete inventory;
- increased inventory turnover ratios;
- shorter production runs.
Disadvantages of JIT:
- supply chain disruptions can block production;
- unexpected price changes can increase costs;
- higher dependency on local sourcing and supplier costs.
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