Business – 4.2 Inventory management – Just in Time (JIT) | e-Consult

Key risks associated with JIT and possible mitigation strategies include:

1. Supply‑chain disruptions: Natural disasters, transport strikes or supplier failures can halt production. Mitigation: Develop multiple qualified suppliers and maintain a minimal strategic safety stock for critical components.
2. Quality control issues: Small batch deliveries increase the impact of defective parts. Mitigation: Implement rigorous incoming inspection procedures and work closely with suppliers on quality assurance.
3. Increased ordering frequency and administrative burden: More frequent orders can raise transaction costs. Mitigation: Use electronic ordering systems and negotiate bulk‑discount contracts for recurring small‑lot purchases.