Just-in-Time (JIT)

Just-in-Time is a manufacturing and supply chain inventory management method designed to reduce inventory along the supply chain while increasing product quality and service levels. JIT involves shipping goods in smaller, more frequent lots - usually just before the products and services are needed. JIT methodology helps reduce flow times within production as well as response times from suppliers and customers; however, Just-in-Time manufacturing increases the potential of supplier capacity risks from demand surges, which can result in the associated financial risk of understock.