Just-in-Time (JIT) is an inventory strategy where stock is received or produced only as needed to meet demand, minimising holding costs and reducing excess inventory. In a WMS context, JIT relies on accurate demand forecasting, timely replenishment, and efficient supplier coordination to ensure products are available for picking without overstocking.

It's the opposite of "just in case," and when done right, it's transformational.

Why JIT Matters

Traditional inventory management operates on fear. "Order extra just in case demand spikes. Hold safety stock just in case suppliers are late. Keep buffer inventory just in case something goes wrong."

This creates warehouses stuffed with inventory "just in case." The result? Capital tied up, storage costs mounting, obsolescence risk increasing, and cash flow strangled.

JIT flips this mindset. Instead of stockpiling against uncertainty, you create systems reliable enough that stockpiling becomes unnecessary. Receive goods when needed, not months early. Hold minimal inventory whilst maintaining excellent service levels.

The benefits are substantial. Toyota, JIT's pioneer, operates with inventory turns of 12-20× versus industry averages of 4-8×. That's not luck. That's systematic excellence in JIT implementation.

Core JIT Principles

Eliminate Waste

JIT considers excess inventory as waste. It's capital not generating returns, space not being productive, and risk accumulating daily.

LEAN principles drive JIT; identifying and eliminating all non-value-adding activities, particularly inventory waste.

Pull-Based System

Traditional: Forecast demand → Order stock → Push through warehouse → Hope customers buy.

JIT: Customer orders → Trigger replenishment → Receive stock → Fulfil immediately.

Production or procurement happens in response to actual demand, not predicted demand. This dramatically reduces overstock and obsolete inventory.

Continuous Flow

Products flow smoothly through processes without queuing or batching. Small, frequent deliveries replace large periodic orders.

Traditional: Receive 1,000 units monthly. JIT: Receive 50 units daily or 250 units weekly.

This maintains stock availability whilst minimising inventory holding costs.

Quality at Source

Defects in the JIT system cause immediate problems; no buffer stock to compensate. Therefore, quality must be perfect at every step.

This drives process improvements that traditional systems tolerate through safety stock.

JIT Implementation Requirements

JIT isn't simply ordering less and hoping for the best. It requires systematic capabilities.

Reliable Suppliers

JIT depends on suppliers consistently delivering correct quantities at agreed times.

Requirements:

• Short lead times

• High reliability (95%+ on-time delivery)

• Quality consistency

• Flexible order quantities

• Geographic proximity (ideally)

Partnership approach: JIT works best with collaborative supplier relationships, not adversarial procurement focused purely on the lowest price.

Accurate Demand Forecasting

Without a buffer stock, demand forecasting must be excellent. Forecast errors directly impact service levels; no safety stock to cushion mistakes.

Capabilities needed:

• Real-time sales data

• Sophisticated forecasting methods

• Regular forecast updates

• Quick response to demand changes

Efficient Processes

JIT eliminates time buffers along with inventory buffers. Processes must be streamlined and reliable.

Focus areas:

• Fast receiving and putaway

• High pick accuracy

• Efficient packing

• Minimal order-to-dispatch time

Warehouse management systems enabling optimised workflows are practically mandatory for JIT operations.

Flexible Operations

JIT requires adapting quickly to changing demand without inventory buffers.

Flexibility sources:

• Cross-trained staff handling multiple roles

• Scalable processes accommodating volume variation

• Multi-skilled suppliers providing a range of products

• Agile systems adjusting to changing requirements

Strong Information Systems

Real-time visibility across the supply chain enables JIT coordination.

Technology requirements:

• Integrated systems linking sales, inventory, and purchasing

• Automated replenishment triggers

• Supplier EDI or API integration

• Real-time inventory tracking

• Demand planning tools

JIT in Different Contexts

Manufacturing

JIT originated in manufacturing; it produces components exactly when needed for assembly.

Toyota Production System: Parts arrive at the assembly line precisely when required. No warehousing, no work-in-progress inventory accumulation.

Benefits: Reduced inventory costs, faster problem identification, improved quality, and lower space requirements.

Retail and eCommerce

Pure JIT is challenging for consumer-facing businesses due to demand unpredictability. Modified approaches are more common.

Cross-docking: Goods arrive at the distribution centre and are immediately shipped to stores or customers without warehousing. Minimal inventory holding whilst maintaining fast delivery.

Vendor-Managed Inventory (VMI): Suppliers monitor retailer inventory levels and replenish automatically. Shifts inventory responsibility upstream whilst maintaining availability.

Drop-shipping: Extreme JIT; products ship directly from the supplier to the customer. Retailer holds zero inventory.

3PL Operations

Third-party logistics providers apply JIT principles through:

Fast inventory turns: Efficient processes moving goods quickly through facilities

Client-specific strategies: Different JIT approaches for different clients based on their products and markets

Technology integration: Systems connecting client demand with inbound replenishment

Advantages of JIT

Reduced Inventory Costs

Lower stock levels mean:

• Less capital tied up (20-50% reduction typical)

• Reduced storage costs

• Lower insurance and handling costs

• Decreased obsolescence risk

Example: £500,000 average inventory under the traditional model. JIT reduces to £200,000. That's £300,000 freed for other investments, plus £60,000-£90,000 annual savings in holding costs (at 20-30%).

Improved Cash Flow

Money not locked in inventory remains available for operations, growth, or profit distribution.

This particularly benefits smaller businesses where capital is scarce.

Increased Efficiency

JIT forces process improvements that traditional inventory buffers mask.

Problems become visible immediately:

• Supplier quality issues can't hide behind safety stock

• Process inefficiencies can't be ignored when buffers don't exist

• Demand forecasting errors show up immediately

This drives continuous improvement.

Better Quality

Without inventory buffers tolerating defects, quality must improve at the source. This reduces waste, returns, and customer dissatisfaction.

Flexibility and Responsiveness

Low inventory means less commitment to specific products. Easier to adapt to market changes, introduce new products, or discontinue underperformers.

Traditional: 6 months of inventory. Market shifts. Stuck with obsolete stock.

JIT: 2 weeks of inventory. Market shifts. Adjust quickly with minimal loss.

Challenges and Risks

Supply Chain Disruption

No buffer stock means disruptions impact operations immediately.

Risk factors:

• Supplier failures

• Transportation delays

• Natural disasters

• Strikes or labour disputes

• Component shortages

Mitigation:

• Multiple suppliers for critical items

• Geographic diversification

• Strong supplier relationships

• Contingency planning

• Some strategic safety stock for the highest-risk items

Demand Variability

Unpredictable demand challenges JIT systems lacking buffer stock to absorb spikes.

Approaches:

• Sophisticated demand forecasting

• Responsive suppliers able to scale quickly

• Flexible internal capacity

• Selective safety stock for volatile items

Implementation Complexity

JIT requires coordination across multiple parties with sophisticated systems and processes.

Success factors:

• Strong project management

• Phased implementation

• Staff training and buy-in

• Technology investment

• Supplier development

Not Suitable for All Products

JIT works best for:

• Predictable demand patterns

• Reliable supply chains

• Short lead times

• Non-perishable products

Poor JIT candidates:

• Erratic demand

• Long supplier lead times

• Critical components with a single source

• Perishable goods requiring a longer shelf life

• Seasonal products with concentrated selling periods

JIT and Technology

Modern warehouse management systems enable JIT through:

Automated replenishment: System triggers orders when inventory reaches defined minimums based on actual consumption rates

Real-time visibility: See inventory levels, inbound shipments, and demand simultaneously

Supplier integration: EDI or API connections enabling automatic order transmission and receipt confirmation

Demand signals: Sales data flowing directly to replenishment calculations

Exception management: Alerts when supply or demand deviates from expectations

Without a strong technology infrastructure, JIT becomes extremely difficult to execute reliably.

Modified JIT Approaches

Pure JIT is rarely practical outside manufacturing. Most operations adopt modified approaches:

JIT Lite

Reduced inventory but maintained selective safety stock for high-risk items or volatile products.

Hybrid Systems

JIT for fast-moving predictable items (A items from ABC analysis).

Traditional inventory management for slow-moving or unpredictable items (C items).

Sequential JIT

Implement gradually across categories:

• Phase 1: Most predictable products

• Phase 2: Medium predictability items

• Phase 3: More challenging categories

Build capability and confidence incrementally.

Getting Started with JIT

1. Assess readiness – Do you have reliable suppliers, accurate forecasting, and efficient processes?

2. Identify pilot products – Start with predictable fast-movers having a reliable supply

3. Establish baseline metrics – Current inventory levels, turns, holding costs, stockout rates

4. Develop supplier partnerships – Negotiate frequency, reliability, communication

5. Implement technology – Ensure systems support real-time visibility and automated replenishment

6. Train team – Everyone must understand JIT principles and their role

7. Start small – Pilot with limited SKUs before scaling

8. Monitor closely – Track performance, identify issues, adjust quickly

9. Expand gradually – Roll successful approaches to additional products

10. Maintain discipline – Resist temptation to revert to safety stock without genuine need