The Just In Time Inventory System

To a manufacturing plant there are several different areas that need your attention. From cost cutting methods to inventory control, you need to understand all of the various aspects of your organization that need your time and attention. One of the areas that you have to focus on is the inventory and to properly control your inventory. Using the Just In Time inventory system is a great way to manage costs but also to ensure you are not going to allow your inventory to get out of control. Warehousing your inventory can be a huge cost and one that you can easily rid yourself of with the right type of system in place. There are other costs that impact your inventory like the wages you need to pay in order to manage your inventory along with the utility costs for the facility.

If you have chosen to implement the Just In Time inventory system you will be able to cut costs right away and to have control over your inventory. With Just In Time you are going to focus on reducing wastes. The goal is to have little or no waste for the company. The goal of Just In Time is to create products to order. You will keep a very small stock on hand that can be used in emergencies but you mostly will focus on creating the items to order so you are not needing to warehouse these items.

Warehousing an inventory is too costly to your organization, especially if you are struggling with your costs due to poor sales and other things. Having inventory at a warehouse leads to many carrying costs that are not necessary for your organization. Keeping the same number of units on hand for all of the different areas of the company products will eliminate waste and unnecessary tasks.

One of the other unique features to Just In Time is that you also have it prepared to send out the finished products to your customers right away. You do not want to finish the products and then move them to a warehouse where they will end up sitting for weeks at a time. Instead you want to ship out the products directly to the customers as soon as you can. This gives them a fresh product but it really helps to reduce your costs as you do not need to warehouse things nor will you need to pay for extra salaries to manage the warehouse.

For JIT to work correctly you will need to take the time to update your financial records, inventory records, and marketing records. All of these things combine together to help you to an assessment of your inventory to know how many products you need to keep on stock and what will maintain the correct level of inventory and will allow you to predict what your production needs are. The goal is to know when you should order your raw materials in order to have them prepared into finished goods in time for them to be delivered when the sales come in. Once and awhile you will have large sales that can make it hard for you to keep up with the inventory orders as you never can predict when they will come in. However for the most part you should be able to manage your inventory with JIT just by using a smart method to calculate and predict orders.

Like many of the inventory systems out there, your company will be able to benefit greatly from JIT. You can find that your profits will increase as you are not spending as much money on other things that are unnecessary like expensive warehousing costs.