In supply management, what does ‘just-in-time’ refer to?

‘Just-in-time’ refers to a strategy in supply management that focuses on minimizing inventory levels. The essence of this approach is to produce or order stock only as it is needed in the production process or to meet customer demand, rather than maintaining large amounts of inventory that can tie up capital and increase storage costs. By doing this, companies can improve efficiency and responsiveness to market changes while reducing waste.

This strategy effectively prevents overproduction and ensures that resources are allocated accordingly, allowing for greater flexibility and the ability to adjust more rapidly to changes in demand without incurring the costs associated with excess inventory. Therefore, minimizing inventory levels through a just-in-time approach helps organizations streamline operations and improve their bottom line.