Just-in-time (JIT) aims to avoid holding buffer stocks by having supplies arrive as needed in production and finished goods delivered to customers as soon as they are completed. JIT requires excellent supplier relationships, multi-skilled and flexible production staff and equipment, accurate demand forecasting, and quality as a priority. The advantages of JIT are reduced inventory costs and stock holding, less outdated stock, and quicker response to demand. However, disruptions to supplies or transportation can delay production, delivery costs increase, and order administration costs may rise.

1. Just in time
• This stock- control method aims to avoid
holding stocks, requiring supplies to arrive just
as they are needed in production, and
completed products are produced.

2. JIT requieres
that no buffer
stocks are held
Components
arrive just as
they are
needed on the
production line
Finished goods
are delivered to
customers as
soon as they
are completed

3. Relationships
with suppliers
have to be
excellent
Production staff
must be multi-
skilled and prepared
to change jobs at
short notice
Equipment and
machinery must
be flexible
Accurate
demand forecast
will make JIT a
much more
succesful policy
The latest IT
equipment will
allow JIT to be
more successful
Excellent
employee –
employer
relationships are
essential for JIT
to operate
smoothly
Quality must be
everyone’s
priority

5. JIT
ADVANTAGES
• Capital invested in
invetory,cost of storage and
stock holding are reduced.
• Less stock becoming
outdated or damaged.
• Quicker response to
consumer demand.
• The staff is multi-skilled
adaptable with more
motivation.
DISADVANTAGES
• Failure to receive supplies,
transport problems or IT
failure can cause production
delays.
• Delivery costs will increase.
• Order administration costs
may rise.
• Reduction in discounts offered
by suppliers.
• Outside factors affect business
reputation.

6. CONCLUSIONS
• Requires a different organisational culture.
• Requieres staff to be accountable for their
perfomance.
• Suppliers need to be reliable.
• May not be suitable for all firms at all times.
• Expensive IT system needed.
• Rising global inflation makes holding stocks of
raw materials more beneficial.
• Higher oil prices will make deliveries of materials
and components more expensive.