Free guide to improve profit margins for online stores. 🚀 Read now

JIT

Updated on

JIT is an inventory management method in which Items are received from suppliers only as they are needed in-store.


What is JIT?

JIT stands for Just-in-time and It helps to reduce inventory holding costs and time, and increase the turnover of the store. With the help of just in time method, you did not need to store large amounts of merchandise inventory or materials, you just needed or can store much smaller rotating stock.

JIT is a workflow technique aimed at reducing flow times within the supply chain, as well as response times from suppliers, stores, and customers.

When you order such items then the main intention of this stock is to be used immediately upon arrival and will spend as little time in your storage area.

This method is best used for stores that have shorter demands.

It is often used by the food industry, technology manufacturers, and book publishers. These industries need to make items quickly to keep up with trends and avoid excess products when that trend and demand fall.

Benefits of JIT

If you sell your product in a retail or an online store then need to know the benefit of JIT for business.

Manufacturing: Just in time helps in reduce the inventory and labor costs. Its increased the production of goods and Improvements in product quality.

Supply: For suppliers, JIT reduces the space that they needed to operate and reduces WIP (work in process).

Store: It helps in the reduction of throughput time also reduces standard hours and Increases the number of shipments for your e-commerce store.

How does just-in-time work?

The process of just in time is very simple:

1. Customer place an order on your eCommerce store.

2. After receiving the order, the store owner or manufacturer orders the material/ product.

3. After the supplier receives the order, delivered the required material to the store owner.

4. After receiving a product or material from the supplier, Assemble the product.

5. Then fulfilled the order of the customer

6. Customer received the final product

Advantages of JIT

  • Reduce defective product loss
  • Increase Inventory Turnover
  • Minimize raw materials for storage
  • Faster product turnaround
  • Smoother production flow
  • Shorter production runs
  • Lower holding costs
  • Reduce labor costs
  • Reduce Work-in-Progress (WIP)

Disadvantages of JIT

  • Supply chain disturbance
  • Missed unexpected orders
  • If Costs rise of the parts, profit margins drop
  • Stock-outs disturb orders
  • Time Pressure to complete order

FAQ

Q. How to save time adding stock to your Shopify store?

Ans. Managing inventory can take a lot of useful time and sometimes it is so complicated that why konigles come up with a very simple solution, read here.

Q. How to manage inventory in Shopify?

Ans. Determine your product costs and send purchase orders to your suppliers by using Konigle’s Inventory Management Tool.

Q. What are the five principles of JIT explained?

Ans. The main five principles of JIT are Quality, Production, Supplier, Inventory, and Human Resource Management.