Just-in-Time (JIT) inventory systems Essay Example

the employees decided to strike for better wages and benefits.

Labor strikes, stock outs, and port lockouts can quickly disrupt an entire supply chain while JIT processes are in place. the company using JIT generally has very little inventory to compensate for the emergency. This lack of inventory is exactly what makes JIT so great to companies in reducing costs, yet making it risky as well by in some cases not having enough inventories to react and keep the supply chain moving Advantages of JIT There appear to be many advantages to using the just-in-time inventory systems for manufacturing companies as well as retail stores.

Just-in-time inventory systems are focused on eliminating waste and gaining more value of the company operations. The concept of JIT is to maintain a competitive advantage by continuous improvement, eliminating excessive waste and completely utilizing the skills and capabilities of the people working within the company. With the development of JIT inventory company's can take advantage of being able to place items in the right place at the time, or create orders only as necessary.

This allows purchase orders to be available on a real time basis, shipping inventory as soon as the items enter the warehouse. JIT inventory software and various services enable a company to identify inventory requirements, allowing companies to have the exact amount of materials in inventory needed to supply customer demand. JIT also encourages companies to rotate materials, ensuring everything bought is used at some point in time. Just in time inventory deviates from poor inventory control and the inefficiency and wasted capital expenditure often experienced by manufacturers.

Software used in JIT can provide real time interaction, showing a

picture of how inventory flows through the company. The software can also provide a direct connection to financial systems offering an integrated view of your business on the basis of cost of sales versus revenue, personnel and operating expenses. The greatest advantage of JIT is the system design that helps manufacturing, distribution and retail companies increase efficiency and customer service.