What is a primary characteristic of a Just-In-Time (JIT) system?

A Just-In-Time (JIT) system is designed to minimize inventory costs by keeping minimal stock on hand and receiving goods only as they are needed in the production process. This approach leads to more efficient use of resources, reduces waste, and cuts down on storage costs associated with holding excess inventory. By aligning raw materials delivery with production schedules, companies can lower expenses related to inventory management and potentially enhance cash flow.

The focus of JIT is not on mass production, which often requires maintaining large inventories to meet anticipated demand, but rather on producing goods only in response to actual customer demand. This effective inventory management practice encourages a more responsive and flexible production system while relying on effective vendor partnerships to ensure timely supply.