Operations · business glossary
What is Just-in-time (JIT)?
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
definition
Receiving inventory only as close as possible to when it's actually needed, minimising cash tied up in stored stock.
Just-in-time (JIT) explained
Just-in-time means producing or ordering goods only when they're needed, rather than holding large stocks.
example
A car plant receives seats from a nearby supplier several times a day, matching the production schedule.
why it matters
It reduces inventory costs and exposes inefficiencies.
common mistake
Running JIT without reliable suppliers, which leads to stockouts when anything goes wrong.
Frequently asked questions
What is Just-in-time (JIT)?
Receiving inventory only as close as possible to when it's actually needed, minimising cash tied up in stored stock. Just-in-time means producing or ordering goods only when they're needed, rather than holding large stocks.
Why does Just-in-time (JIT) matter?
It reduces inventory costs and exposes inefficiencies.
What is a common mistake with Just-in-time (JIT)?
Running JIT without reliable suppliers, which leads to stockouts when anything goes wrong.
Related terms
Lean
An operating philosophy focused on systematically removing any step in a process that doesn't add value the customer would pay for.
Inventory turnover
How many times a business sells and replaces its stock over a given period — a higher number generally means healthier cash flow.
Supply chain
The full sequence of steps and parties involved in getting a product from raw material to the final customer.