What does 'Just-in-Time' (JIT) inventory management aim to achieve?

The 'Just-in-Time' (JIT) inventory management approach is focused on aligning raw-material orders with production schedules to ensure that materials arrive just as they are needed in the production process. This strategy minimizes the amount of inventory a company holds at any given time, which in turn reduces carrying costs and waste associated with overstock. By synchronizing inventory levels with production demands, businesses can improve efficiency, respond swiftly to changes in customer needs, and reduce the risk of obsolescence.

In this context, the emphasis is on producing only what is required, when it is required, fostering a more streamlined and responsive supply chain. This method stands in contrast to traditional inventory management practices that often involve maintaining high inventory levels, which can lead to increased costs and inefficiencies.