## Just-In-Time (JIT) Inventory Management
Definition: JIT is an inventory management system that aims for zero inventory in stores. Materials are purchased only when they are actually needed for production.
Core principle: Buy and produce only when required, avoiding excess stock.
Also known as: Demand Pull System or Pull Through Production System — because production is pulled by actual customer demand rather than pushed by forecasts.
### Two key principles
1. Produce goods only when required.
2. Deliver products only when customers want them.
### How the JIT cycle works (order of events)
1. Demand for the final product arises — customer places an order.
2. Production starts to process that demand.
3. Material requirement is sent to the Purchase department — only at this stage, not before.
4. Order for raw materials is sent to the supplier.
5. Supplier delivers the material for production.
> Notice that nothing moves until a real customer order exists. This is what eliminates buffer stock.
### Objectives
- Minimise inventory cost.
- Eliminate waste.
- Ensure just-in-time delivery of both materials and finished products.