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# Just-in-Time Inventory

## Definition

A capital management practice in which goods are received from suppliers
only as they are needed for production or fulfilment, minimising the
stock held at any moment. JIT eliminates inventory as a buffer by
replacing it with reliable process coordination — synchronised production
schedules, short lead times, and high-frequency deliveries. The capital
released from inventory reduction is the primary financial justification.

## Source

Capital and Inventory in Supply Chain Management, §Just-in-Time Inventory

## Supply Chain Domain

Capital Management

## VSM Assignment

S3 — JIT is a management-level decision about how to deploy circulating
capital. It sets the policy for inventory levels (near-zero) and enforces
that policy through supplier relationship design and production scheduling.

## WoN Concept

Circulating Capital — Smith distinguishes circulating capital (consumed
and replaced each productive cycle) from fixed capital (durable). JIT is
an explicit strategy to minimise the circulating capital locked in
inventory at any moment, accelerating the velocity of the capital cycle.
The faster capital circulates, the greater the productive output per unit
of capital stock — precisely Smith's argument for keeping circulating
capital in motion rather than idle.
