What does "just-in-time" inventory management aim to achieve?

"Just-in-time" inventory management is a strategy aimed at minimizing waste by ensuring that materials and products are delivered precisely at the time they are needed in the production process. This approach helps reduce storage costs and eliminates unnecessary inventory holding, which can lead to waste if products spoil or become obsolete.

By receiving goods only as they are required for production, companies can streamline their operations, improve efficiency, and enhance cash flow since they are not tying up capital in excess inventory. The focus is on creating a streamlined production schedule that aligns closely with demand, allowing businesses to operate more flexibly and responsively to market needs. In contrast, maximizing storage space, increasing production costs, and extending lead times can introduce inefficiencies and additional waste, which contradicts the principles of just-in-time inventory management.