What is the main concept behind the Just-In-Time inventory system?

The main concept behind the Just-In-Time (JIT) inventory system revolves around aligning raw-material orders with production schedules. This approach emphasizes reducing inventory levels to decrease holding costs and minimize waste. In a JIT system, materials are delivered precisely when they are needed in the manufacturing process, rather than being stockpiled in advance. This synchronization allows for a more efficient production flow, as it reduces the need for extensive storage space and the associated costs.

The effectiveness of JIT is rooted in its focus on eliminating excess inventory, which can lead to obsolescence or spoilage. By closely coordinating supply and production, businesses can respond more swiftly to market demands and adjust their operations accordingly. This led JIT to become a cornerstone in lean manufacturing practices, where efficiency and waste reduction are critical goals.