A JIT inventory is a management strategy that ensures the production schedules go hand in hand with the suppliers’ raw material orders. Also called lean manufacturing, JIT inventory aims to eliminate any form of waste and maximize efficiency (Voss & Robinson, 2019). Through a JIT system, a company reduces the production costs by only producing small lots of the product as is required. One benefit of this system is that it eliminates storage, inventory, and raw material costs. Examples of companies that have successfully used a JIT system include Walmart, Drod Shippers, McDonald’s, Toyota, and Dell. With a JIT system, an industry enjoys a smooth-flowing process without the kinks; customers get what they want from a company without it having to store the extra products (Voss & Robinson, 2019). Although a JIT system is an effective approach, it would be totally inappropriate for some companies.
One example of the sphere for which JIT would be completely inappropriate is the hotel and tourism industry. These are businesses that have their low and high seasons. One disadvantage of JIT systems is the assumption that the costs of the parts of the production costs remain constant (Voss & Robinson, 2019). With the hotel and tourism industry, the suppliers’ raw materials are in terms of consumables like vegetables and fruits. In this circumstance, the JIT would be totally inappropriate because these raw materials cannot stay fresh for long (Voss & Robinson, 2019). Another example is the home delivery services that depend on orders from customers. In such a case, the efficiency of service may be hampered by supply shocks that may make it challenging to meet the current demand.
Reference
Voss, C. A., & Robinson, S. J. (2019). Application of just-in-time manufacturing techniques in the United Kingdom. In U. Holl & M. Trevor (Eds.), Just-in-time systems and Euro-Japanese industrial collaboration (pp. 63–70). Routledge.