When companies — first in manufacturing, particularly automakers, and then in other sectors — adopted Just-In-Time (JIT) tactics, they did so primarily to reduce inventory costs. For the most part, this strategy worked. Reducing stocks of raw materials, parts, assemblies and finished goods reduces carrying costs, allowing companies to invest the freed-up funds in more productive assets and projects. In turn, the reduction in inventories decreases the likelihood of being stuck with obsolete parts and finished goods.

Download this paper now to read more.