Disadvantages of just in time (JIT) inventory management system.

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 disadvantages of just in time inventory management system:

  • Just in time allow little flexibility so that unforeseen delays or errors in delivery times may cause significant problems in production.
  • The buyer is heavily dependent on the supplier to maintain the quality of goods delivered and on time delivery.
  • the buyer is relying on the supplier not to increase price without due notification and negotiation as it may be difficult to find an alternative source of supply at short notice.

1 thought on “Disadvantages of just in time (JIT) inventory management system.”

  1. Pingback: Just in time (JIT) Revision question (NBAA, B5, NOV 2018) - ACCA ONLINE ACCOUNTING TEACHER

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