1.JIT
Key considerations: Supply chain reliability, demand forecasting accuracy, short lead times, supplier partnershipsBenefits: Low holding/obsolescence costs, free cash flow, minimal warehouse spaceDrawbacks: High stockout risk (demand spikes/supplier delays), heavy reliance on forecasting
2.warehousing
Key considerations: Warehouse network design, safety stock levels, inventory turnover, electronics storage requirements
Benefits: Fast fulfillment, supply chain disruption buffer, bulk purchase discounts, regional demand adaptationDrawbacks: High fixed storage costs, obsolescence risk for slow-moving tech, tied-up capital
3.overstocking
Key considerations: Demand surge anticipation, bulk procurement costs, electronics obsolescence timelines, storage capacityBenefits: No stockouts, bulk discount gains, meets unplanned demandDrawbacks: Severe obsolescence losses, high holding costs, forced markdowns, cash flow lock-up
4.understocking
Key considerations: Low holding cost targets, cash liquidity, supplier restock speed, customer stockout toleranceBenefits: Near-zero holding/obsolescence costs, maximum cash flexibility
JIT is a strategy aimed at producing or purchasing goods just in time for use in the production process or to meet customer demand.
Key Features and Principles:
Lean manufacturing, reduced lead times, and demand-driven production.
Benefits of JIT Inventory:
Lower holding costs, reduced waste, and improved responsiveness.