just-in-time (JIT)

Definition:
A fashionable title for the harmonization of supply with demand, conceptually idealized as stockless production, or STOCKLESS PURCHASING. The practice may be seen as the practical apotheosis of MARKETING, although in reality it is somewhat limited in applicability, at least in its ultimate form. The key requirements for the operation of the concept are generally regarded as being the availability of accurate demand forecasts, the existence of dependable suppliers and the willingness of suppliers to treat the customer on a preferential basis. Apart from the benefit of materials INVENTORY reduction or elimination, the adoption of the concept also entails reduction of work-in-progress inventories, reduction in the numbers of suppliers, involvement of suppliers in quality improvement programmes and the encouragement of long-term working relationships with suppliers. Risks to the customer are increased in the event of supply failure, and also in the event of suppliers or customers lapsing into a state of competitive inertia.

Cross-References:
[inventory] [marketing] [stockless purchasing]

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