how does just in time inventory work 
the just in time jit inventory system minimizes inventory and increases efficiency jit production systems cut inventory costs because manufacturers receive materials and parts as needed for production and do not have to pay storage costs manufacturers are also not left with unwanted inventory if an order is canceled or not fulfilled one example of a jit inventory system is a car manufacturer that operates with low inventory levels but heavily relies on its supply chain to deliver the parts it requires to build cars on an as needed basis consequently the manufacturer orders the parts required to assemble the vehicles only after an order is received for jit manufacturing to succeed companies must have steady production high quality workmanship glitch free plant machinery and reliable suppliers the jit inventory system contrasts with just in case strategies where producers hold sufficient inventories to have enough products to absorb maximum market demand advantages and disadvantages of jitjit inventory systems have several advantages over traditional models production runs are short which means that manufacturers can quickly move from one product to another also this method reduces costs by minimizing warehouse needs companies also spend less money on raw materials because they buy just enough resources to make the ordered products and no more the disadvantages of jit inventory systems involve potential disruptions in the supply chain if a raw materials supplier has a breakdown and cannot deliver the goods promptly this could conceivably stall the entire production line a sudden unexpected order for goods may delay the delivery of finished products to end clients example of jitfamous for its jit inventory system toyota motor corporation orders parts only when it receives new car orders although the company installed this method in the 1970s it took 20 years to perfect it 4sadly toyota s jit inventory system nearly caused the company to come to a halt in february 1997 after a fire at japanese owned automotive parts supplier aisin decimated its capacity to produce p valves for toyota s vehicles because aisin is the sole supplier of this part its weeks long shutdown caused toyota to halt production for several days 5this caused a ripple effect where other toyota parts suppliers likewise had to temporarily shut down because the automaker had no need for their parts during that time period consequently this fire cost toyota 160 billion yen in revenue 67at the start of the covid 19 pandemic and its ripple effect on the economy and supply chain things like paper surgical masks toilet paper and hand sanitizer experienced disruption this was because inputs from overseas factories and warehouses could not be delivered in time to meet the surge in demand caused by the pandemic 8special considerationskanban is a japanese scheduling system that s often used in conjunction with lean manufacturing and jit taiichi ohno an industrial engineer at toyota developed kanban in an effort to improve manufacturing efficiency 9the kanban system highlights problem areas by measuring lead and cycle times across the production process which helps identify upper limits for work in process inventory to avoid overcapacity 