How do just in time (JIT) inventory systems differ from traditional inventory systems?

Just-in-time (JIT) inventory systems prioritize minimizing inventory levels by receiving goods only as they are needed in the production process. This approach contrasts with traditional inventory systems that often maintain larger stock quantities to ensure availability.

The key characteristic of JIT is the emphasis on receiving smaller quantities of merchandise more frequently. By doing this, companies can reduce holding costs, minimize waste, and enhance efficiency. Frequent deliveries allow businesses to respond quickly to changes in demand, thus avoiding overstock situations and reducing the risk of obsolete inventory.

Traditional inventory systems, on the other hand, typically rely on maintaining larger inventories to buffer against uncertainties in demand or supply. This means that they may not deliver goods as frequently, which can lead to increased storage costs and the challenge of managing excess inventory.

In summary, the focus of JIT on delivering less merchandise more frequently allows for a leaner, more responsive supply chain, which is a defining feature that sets it apart from traditional inventory systems.