Inventory planning
Just-in-Time (JIT) Inventory
By the Supply Chain Manager team · Updated October 16, 2026
Just-in-time (JIT) is an approach that keeps inventory minimal by receiving goods only as they are needed, relying on short, reliable supply lead times.
JIT grew out of lean manufacturing. Its promise is lower inventory, less waste and problems exposed instead of hidden by stock. Its requirement is very reliable suppliers and steady demand; disruptions hit immediately because there is no buffer.
Many distributors exist precisely so their customers can run JIT: the distributor holds the buffer so the customer does not have to.
In practice most distributors run a mix: lean stock on items with short, reliable lead times and local suppliers, and deliberate buffers on items that are imported, seasonal or critical to customers. The right question is not whether to be JIT, but which SKUs can safely run with very little stock.
JIT example
Illustrative: a contractor buys fixings for each job only days before it starts, relying on a distributor's same-day availability. The distributor must then hold enough stock to make that promise.
Why JIT matters for distributors
Understanding JIT customers explains your own demand. Their orders are frequent and small, and they switch supplier quickly when you are out of stock.
Common JIT mistakes
- Adopting JIT on SKUs with long or unreliable lead times.
- Cutting safety stock to JIT levels without fixing supplier reliability first.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.