Just in time inventory management, is a stock/inventory administration system, used to deal

with the stock that is kept away in the storage. It includes accepting merchandise from
providers as and when they are required, rather than carrying a huge level of stock at a
particular time[ CITATION Bar15 \l 5129 ]. Just in time inventory management is also referred
to as Toyota production systems as Toyota industry was the founder of this inventory
managing systems to cater for losses as many cars would have been put up for sale for
which there was no demand.
JIT inventory management has its benefits therefore many organisations are adapting to it, some
of benefit may include where o rganizations like to utilize JIT as it is viewed as a more cost-
effective strategy for holding stock as only the required level of stocks are kept in the
business storage, hence saving costs on security and storage facility costs. Secondly, JIT also
frees up funds which can be used in other places of the business therefore adequate use of
organisations resources. Just in time inventory management also has its drawbacks; where
unit level managers are required to do proper planning for future movement of good after
studying the market as the company could run out of stock and seize operations as the
company will not have stock to meet customers demand which will disrupt sales and set
back the organisations sales will result in less revenues for the company hence a decline on
the ratios calculated upon returns on sale. Furthermore, delays where suppliers may
fallback in supplying stocks which may result in shortage of stocks levels in the company to
meet the demand of customers as normal company would keep excess stock for unforeseen
events to meet demands of the customers. A real-life example would be where Kmart had
lacked in foresight ‘‘In the mid-to-late 1990s when Kmart and Walmart were having their
price wars, Walmart decided to implement a supply chain system known as “just-in-time”
inventory allowing shelves to be restocked efficiently. Kmart didn’t take any steps to adopt a
modern supply chain management system. The result? Between June 1998 and June 2000,
stock prices for Walmart rose 82% while Kmart’s dropped 63%. In 2002, Kmart filed for
bankruptcy, closed hundreds of stores and merged with Sears Roebuck in 2005.Read more
at’’ [ CITATION Pau16 \l 1033 ].
Many companies use just in time inventory management in Fiji of which one is Mc Donald’s.
Mc Donald’s a fast-food company ‘‘has have everything they need to assemble and don’t do
so until the order has been taken, except for a few finished products.’’ (David kigerinfo,
2016). This makes the method so standardized that each time a client goes they get the
same experience; all of its goods kept away and will not make any orders until an order is
placed. Therefore, zero wastage of goods and only those goods are produced to meet
demand only and not anything further as this result zero wastage and requires less space for
storage. Companies like MC Donald’s has a very small storage space when compared to
other competing companies hence the best inventory management is considered to be, just
in time inventory management as it curbs the storage problems and also reduces the costs
from spoilage and wastage of goods as goods or orders are only processed when an order
has been placed.
References
Barlow, P., 2015. Babington. [Online]
Available at: https://babington.co.uk/blog/accounting/just-in-time-advantages-and-disadvantages/
[Accessed 15 04 2019].

davidkigerinfo, 2016. David Kiger's Blog. [Online]

Available at: https://davidkigerinfo.wordpress.com/2016/02/22/analyzing-top-examples-of-just-in-
time-inventory-and-production-management/
[Accessed 24 04 2019].

Trujillo, P., 2016. Industry research & White papers. [Online]

Available at: https://www.business2community.com/product-management/6-times-horrific-
inventory-control-almost-killed-companies-01659644
[Accessed 24 04 2019].