The Pros And Cons To Just In Time Inventory

Are you looking for a new way to manage your inventory? Just in time inventory is one of the most popular programs used to manage your inventory and to provide your customers with products in a timely manner. How much are you paying to order your inventory supplies and how much are you paying to carry the inventory items until your customers purchase them? These costs are things that need to be considered when you are focused on keeping your costs lower so you don't end up dealing with negative cash flow concerns and other things.

Managing inventory will come down to a number of factors. You have to consider the demand for your products. Your customers may end up really increasing your inventory needs due to a higher demand. It is also important that you look into other costs as well like how much it costs you to warehouse your inventory.

Using Just in time manufacturing you will be able to make products to order. You don't want to hold inventory as it costs your company too much money. Having zero inventory allows you to keep the cost lower but you also have the ability to serve your customers with fresh products. Unlike traditional inventory, you will easily be able to manage your costs more effectively since you do not even have inventory or a warehouse that you need to deal with.

The only thing that makes Just in time a risk is when you have large bulk orders. These orders can place additional strain on your production line and it can be incredibly difficult for you to be able to fulfill the orders quickly. One thing that you also need to watch out for is the wastage that can occur if you end up having products that are damaged in the production line.

With Just in time you will up dealing with certain changes to your production line. You need to ensure that you have a clear and precise communication line in order to give you a smooth-flowing production line. Without communication and a line that works effectively it can be challenging for you to be able to maintain just in time properly.

How can you provide your production line with the right type communication to keep it working correctly? A great way to do this is by working on using signals like Kanban. The Kanban method will provide signals that allows you to have lights and other things to indicate the right method of how you will be able to keep inventory flowing properly. One of the reasons why Kanban works effectively is due to the way in which you can manage each process by having the right type of supplies and things ready when you need them to create the product. What this will also do is to provide you with faster production and can decrease waste at the same time as you are able to keep everything organized properly in order to give you effective production.

Using just in time inventory you have multiple things that you have to consider. There are a lot of pros and cons to using just in time inventory. Here are some things that you have to consider:
- Easier inventory flow
- Reduced set up and changeover time
- No need for inventory storage, reducing warehousing costs
- Possible interruptions in the supply flow chain
- Problems with defects if you do not have the right type of supplies to work with
- Unable to acquire supplies at bulk prices or when costs are lower due to economy as you don't have the warehousing room to hold them.