![]() ![]() This allows Toyota to maintain only the inventory that is needed so that they can easily pivot when there are changes in consumer demand. ![]() Toyota’s JIT inventory is a great example of this as raw materials are placed on the production floor only after a customer has placed an order. It also shifts the operational focus to other aspects of the production process, which can make it easier to implement large-scale process improvement projects that can yield a high return on investment. A well-run JIT inventory system makes it possible to function effectively with virtually no inventory. The central goal of a just-in-time inventory strategy is to cut the total cost of the supply chain in order to reduce an organization’s inventory and capital footprint. Just-in Time Inventory: Advantages Reduced Logistical Costs Although rewarding, this multi-step process can be challenging to implement, so it’s important to closely consider the benefits and challenges of a JIT inventory system. ![]() Managers then seek to streamline the inventory process by making small inventory purchases to stock up on only what’s needed. The first step is to assess and document current inventory, marking materials and parts that are needed, as well as those that may potentially be needed in the future. Implementing a JIT inventory system is a process that has multiple steps. These slight but powerful changes in Toyota’s approach to production have resulted in decreased inventory and lower costs. As a part of their production strategy, materials are not only prohibited from the production floor until needed, but parts are not even able to be placed at a station unless the assembly process is actively in place. Toyota is a leading company efficiently utilizing a JIT inventory system. Just-in-time inventory (JIT) is a production system designed to cut costs and optimize logistics by delivering and receiving materials and parts right when they are needed, never too early or late. ![]()
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