Question

Why is just-in-time systems so popular?

Answer 1

Just in time is a strategy of working in which a comapny is not required to store inventory from longer period of time. It works at reducing flow times within production system & giving services and responses from suppliers and customers.

It is very popular because it adds value by increasing efficiency and decrease waste by receiving goods only when they are required for production resulting in decrease in inventory cost.

Factors upon which JIT is used & popular :

Less space required: With a faster movement of inventory , there is no requirement of keeping stock for safety purpose which in turn saves the cost of warehouse.

Minimising Waste: A faster movement of stock prevents stock from getting damaged and obselete. Only that much of stock is purchased which is required for production purpose, also reduces the replacing cost of old stock.

Investment: As small amount of stock are required to be purchased, funds are also required in smaller quantities, thus good for those companies who does not have large funds available.