What does Just-in-Time (JIT) inventory management aim to achieve?

Just-in-Time (JIT) inventory management primarily aims to align raw material orders with production schedules. This approach is focused on producing goods only as they are needed in the production process, thereby minimizing inventory levels and reducing costs associated with holding large stocks of raw materials and finished goods.

By synchronizing raw material deliveries with production requirements, JIT helps to eliminate waste associated with excess inventory. It emphasizes a pull system, where the production is guided by actual demand rather than forecasts. This leads to improved cash flow and efficiency as companies maintain lower inventory levels, ensuring that materials arrive just as they are needed for manufacturing. The success of JIT relies heavily on close coordination with suppliers and a streamlined production process, allowing for greater flexibility and responsiveness to changes in consumer demand.