Just-In-Time Inventory Strategy
The Just-in-time (JIT) inventory strategy is an inventory management strategy that wishes
to have as much finished product at the right time, consequently reducing inventory costs
and wastes without negatively impacting customer supply. The JIT inventory management
methodology uses signals, which automatically activate the replenishment of inventory, cut
down on inventory ordering in anticipation of reduced requirements, and improve financial
outputs of the business (“Just-In-Time (JIT) Inventory Management in a Restaurant”).
Basic elements of the JIT inventory management process include minimum inventory
levels, Pull-through production, quick setup and flexible work cells, a multiskilled work
force, high levels of product quality and effective preventive maintenance (Powers,
Needles, and Crosson). While JIT is more commonly used in manufacturing processes
rather than end-user facing retail environments, restaurants have been adopting JIT
management practices.
In a JIT environment inventory is kept low in order reduce the space needed for inventory,
the amount of materials handing, and the amount of inventory obsolescence. It also
reduces the need for inventory control facilities, personnel, and recordkeeping. Also, the
amount of work in process inventory and the amount of working capital tied up in all
inventories is significantly reduced. Taking all of these reductions together, cost is reduced
considerably (Powers, Needles, and Crosson ). For example, in a restaurant, the inventory
is kept low in order to avoid the wastage of food. Also it allows for a smaller space where
fridges and pantries need to be located in order for the food to be stored. This method also
