What does "just-in-time" inventory aim to achieve?

"Just-in-time" inventory aims to increase efficiency by receiving goods only as they are needed in the production process. This inventory management strategy minimizes holding costs and reduces the amount of stock on hand, allowing companies to achieve a leaner operation. By synchronizing inventory levels with production schedules, businesses can avoid overproduction and excess stock, fostering a more efficient supply chain.

The goal of just-in-time is to align inventory orders with actual customer demand, which helps in reducing waste and minimizing excess inventory costs. This approach can lead to cost savings and improved cash flow as companies only pay for goods that are immediately necessary for production.

Meanwhile, maximizing storage space for excess stock does not align with the just-in-time philosophy, as it focuses on reducing inventory. Eliminating inventory completely is not practical, as some level of inventory is usually necessary to maintain operations. Ensuring high inventory turnover is a characteristic that may be observed in a just-in-time system, but it is not the primary aim; rather, the focus is on reducing inventory while meeting production needs efficiently.