In operational efficiency, what does 'just-in-time' inventory mean?

'Just-in-time' inventory management is a strategy that focuses on minimizing inventory levels by ordering supplies only as they are needed for production or sales. This approach helps to reduce carrying costs associated with holding large quantities of inventory, such as storage expenses, insurance, and potential obsolescence of stock.

By implementing a just-in-time system, organizations can improve their operational efficiency, as it allows them to be responsive to actual demand without overcommitting resources to stock that may not be utilized. This method aims to synchronize the flow of materials with production schedules, ensuring that input materials arrive just at the moment they are required, thus optimizing resource utilization and reducing waste.

Overall, adopting a just-in-time inventory system aligns with principles of lean management, emphasizing efficiency, waste reduction, and continuous improvement.