Just in Time (JIT) is an inventory management systems are used to manage inventory that is kept in storage. The premise is that you receive the amount of goods from suppliers, when they are required, rather than carrying a large inventory at once. The benefits of this type of system include:
Better Cash Flow Management
JIT inventory management is ideal for smaller companies that don’t have the funds available to purchase large amounts of stock at once. Ordering stock as and when it’s needed helps to maintain a healthy cash flow.
Less Space Needed
Buying what you need, when you need it, means a faster turnaround of stock, so you don’t need as much warehouse or storage space.. This reduces the amount of storage your company needs to lease or buy and ultimately, provides better management of cash flow and expenses.
Waste Reduction
A faster turnaround of inventory, saves money by preventing investment in unnecessary stock, and reduces the need to replace old stock.
Flexibility as Material Needs Change
As your products and manufacturing techniques change, a JIT inventory management system, allows you to purchase different materials and not be stuck holding onto your previous stock of material.
Though, JIT Inventory systems are ideal for small business, the downside of keeping a JIT inventory system is to ensure your build in time to order the material you need and make sure it is in inventory when you need it. Mayer Alloys Corporation is one of many suppliers that specializes in JIT distribution, providing companies with what they need, when they need it and for most companies, offering Net 30 billing terms.
