Choosing the right inventory strategy can have a massive impact on your cash flow and efficiency. The two most common approaches are Just-In-Time (JIT) and Just-In-Case (JIC).
Just-In-Time (JIT)
Concept: With JIT, you order and receive inventory only as it's needed for production or to fulfill customer orders. The goal is to minimize inventory holding costs.
- Pros: Reduces storage costs, minimizes waste, improves cash flow.
- Cons: Highly vulnerable to supply chain disruptions. A sudden delay can halt your entire operation.
Just-In-Case (JIC)
Concept: JIC is the more traditional approach where you hold a surplus of inventory to act as a buffer against unexpected demand spikes or supply chain issues.
- Pros: Protects against stockouts, allows you to handle unexpected large orders.
- Cons: Higher storage and capital costs, risk of dead stock if demand doesn't materialize.
Which is Right for You?
For most small to medium-sized businesses, a hybrid approach is often best. Use a powerful inventory system like the Business Portal to analyze your sales data. You can apply JIT for predictable, steady-selling items and use a JIC approach for your unpredictable bestsellers to ensure you never miss a sale.
