The just in time (JIT) inventory management system was developed in 1970s by Toyota in Japan. It is different to other inventory management system which are based on push production flow system whereby the products are made and placed in inventory awaiting sales order from customers .
Just in time is based on pull production flow system. This means that the product is not made until a customer request it and components are not produced until they are required in the next stage of manufacturing .
The following are advantages of using just in time inventory management system:
- Just in time seeks to eliminate waste at all stages of the manufacturing process by improving workflow planning that emphasizes quality control.
- It builds strong relationship between seller and buyer of goods. the seller benefits from secure , regular orders ensuring future business. The buyer benefit from lower inventory holding cost , lower investment in inventory and less inventory management problems. The buyer may also obtains bulk purchase discounts or lower purchase costs.
- Just in time emphasizes quality control in production process and this will reduce scrap, reworking and set up costs. This result in smooth flow of material and work through the production process with no queues or idle time