Just in Time Inventory vs Just in Case Inventory-How the supply chain is changing inventory priorities



In the business world, there are two main types of inventory: just-in-time inventory and just-in-case inventory. Both have their own advantages and disadvantages, so it’s important to understand the difference between the two before deciding which one is right for your company. Our latest supply chain challenges may change your decision on which inventory system is currently right for you.

Just-in-time inventory (JIT) is a system where products are only ordered and produced when they are needed, rather than being stockpiled in advance. This can lead to lower inventory costs, as you don’t need to pay for storage space for excess products. JIT can also help reduce waste, as there is no need to dispose of outdated or damaged goods sitting in storage. However, JIT can be risky, as you may not have the products you need on hand when demand spikes. Our current challenges with the supply chain may also make this a riskier option now.

Just in case inventory (JIC) is the opposite of JIT, and refers to a system where products are stockpiled in advance in order to avoid running out. This can lead to higher inventory costs, as you need to pay for storage space for all of the products that you may not end up using. However, JIC can give you peace of mind, knowing that you have the products you need on hand at all times while we are dealing with the current supply chain issues.

So, which system is right for your company? It depends on your needs and preferences and the level of risk you are willing to take. Considering the current supply chain challenges, you may want to rely on JIC if the loss of business will be bigger than the extra costs of stockpiling inventory. If you’re looking to save money on inventory costs, JIT may be the way to go. If you want to learn more about our services and which inventory system is right for you, reach out to us here.