{"id":703,"date":"2019-08-08T15:40:33","date_gmt":"2019-08-08T15:40:33","guid":{"rendered":"https:\/\/www.shipbob.com\/uk\/blog\/just-time-inventory-ecommerce\/"},"modified":"2025-09-28T21:00:46","modified_gmt":"2025-09-28T21:00:46","slug":"just-time-inventory-ecommerce","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/uk\/blog\/just-time-inventory-ecommerce\/","title":{"rendered":"Just in Time Inventory Systems for Ecommerce: Is JIT Inventory Worth It?"},"content":{"rendered":"\n<div class=\"wp-block-shipbob-blocks-single-toc single-toc\" data-controller=\"blog-toc-controller\" data-action=\"scroll@window-&gt;blog-toc-controller#scrollChanged:passive\" id=\"toc-component\"><div class=\"single-toc-overview\"><p>Table of Contents<\/p><div class=\"single-toc-read-time\"><p>** Minutes<\/p><\/div><\/div>\n<p><a href=\"#h-what-is-just-in-time-jit-inventory\">What is Just in Time (JIT) inventory?<\/a><\/p>\n\n\n\n<p><a href=\"#h-history-of-just-in-time-inventory\">History of Just in Time inventory<\/a><\/p>\n\n\n\n<p><a href=\"#h-is-just-in-time-worth-it\">Is Just in Time worth it?<\/a><\/p>\n\n\n\n<p><a href=\"#h-jit-inventory-for-ecommerce-stores\">JIT Inventory for ecommerce stores<\/a><\/p>\n\n\n\n<p><a href=\"#h-make-your-ecommerce-supply-chain-jit-efficient\">Make your ecommerce supply chain JIT efficient<\/a><\/p>\n\n\n\n<p><a href=\"#h-conclusion\">Conclusion<\/a><\/p>\n\n\n\n<p><a href=\"#h-improve-inventory-management-with-shipbob-s-wms\">Improve inventory management with ShipBob&#8217;s WMS<\/a><\/p>\n<\/div>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/inventory-management\/\">Inventory management<\/a> for your ecommerce business can get a bit complicated. Orders come flying in, products need to be shipped out, and it can be challenging to keep track of what you have in and <a href=\"https:\/\/www.shipbob.com\/inventory-kpis\/safety-stock\/\">out of stock<\/a>.<\/p>\n\n\n\n<p>Customer satisfaction is hugely important to your business, so making sure orders are fulfilled on time needs to be a top priority. You need a solution that keeps all of your inventory in check and ensures you replenish in time.<\/p>\n\n\n\n<p>Enter Just in Time (JIT) inventory, a practice that helps <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-optimization\/\">optimise inventory<\/a>, so your business only has what is needed on hand.<\/p>\n\n\n\n<p>While manufacturing companies like Toyota have spent a lot of time and money on perfecting this process, it is not always as easily replicated for ecommerce businesses.<\/p>\n\n\n\n<p>Here\u2019s a comprehensive guide on what JIT inventory is and how to get it right for your business.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-just-in-time-jit-inventory\">What is Just in Time (JIT) inventory?<\/h2>\n\n\n\n<p>JIT is a method of <a href=\"https:\/\/www.shipbob.com\/blog\/ecommerce-supply-chain\/\">ecommerce supply chain<\/a> management that is designed to cut costs, increase efficiency, and decrease waste by receiving goods when they are needed. It effectively means having enough inventory available to meet customer demand but no more than just enough, so you need to stockpile the remainder pretty quickly thereafter.<\/p>\n\n\n\n<p>While implementing JIT inventory for an ecommerce business can be difficult, the good news is <a href=\"https:\/\/www.shipbob.com\/\">ShipBob<\/a> offers the next best solution \u2013 making sure <a href=\"https:\/\/www.shipbob.com\/blog\/warehousing\/\">warehousing<\/a> costs and <a href=\"https:\/\/www.shipbob.com\/ecommerce-shipping\/reduce-shipping-costs\/\">shipping costs<\/a> are as low as possible.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-history-of-just-in-time-inventory\">History of Just in Time inventory<\/h2>\n\n\n\n<p>The Just in Time inventory method <a href=\"https:\/\/www.thebalancesmb.com\/just-in-time-jit-inventory-management-393301\">originated in Japan<\/a> and is also known as the Toyota Production System, as the car manufacturer adopted the inventory management system in the 1970s.<\/p>\n\n\n\n<p>Many believe JIT was originally formed in Japan\u2019s shipyards as a result of Japan\u2019s lack of money post-war, their lack of natural resources, and their lack of space for large factories and inventory.<\/p>\n\n\n\n<p>JIT was then implemented in Western countries at the start of the 1980s.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-is-just-in-time-worth-it\">Is Just in Time worth it?<\/h2>\n\n\n\n<p>Effectively implementing a JIT inventory management system can lead to many advantages that enable manufacturers to process inventory quickly and efficiently. However, there are also some downsides to JIT. Even the slightest disruption can lead to huge problems.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-pros-of-jit-inventory\">Pros of JIT inventory<\/h3>\n\n\n\n<p>JIT has several benefits to a company\u2019s production process, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reduced storage costs<\/strong>: Due to the fact that inventory is produced or purchased at such short notice, there is no need to have extra or unsold inventory that takes up valuable <a href=\"https:\/\/www.shipbob.com\/warehouse-operations\/inventory-storage\/\">inventory storage space<\/a>. Warehouse space is expensive, which can also lead to high <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-carrying-costs\/\">inventory carrying costs<\/a>.<\/li>\n\n\n\n<li><strong>Improved communication<\/strong>: JIT systems are only effective when communication is clear. To ensure problems don\u2019t occur and the inventory system runs smoothly, teams need to communicate regularly.<\/li>\n\n\n\n<li><strong>Less waste<\/strong>: Since JIT systems rely on customer demand and only manufacture what has been recently purchased, it eliminates the volume of waste and unnecessary stock.<\/li>\n\n\n\n<li><strong>Smaller inventory investments<\/strong>: Companies spend a smaller amount of money on raw materials because they only buy the amount of resources they need to produce orders \u2013 nothing more and nothing less. Inventory is often the largest expense for businesses, and JIT reduces the need to order large bulk inventory batches that will lead to product sitting around for a while.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-cons-of-jit-inventory\">Cons of JIT inventory<\/h3>\n\n\n\n<p>While JIT can have many advantages, there are also some downsides, which include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Hard to implement<\/strong>: Companies that implement a JIT inventory system will quickly understand there is little room for error, and so there is a chance they\u2019ll experience difficulties and setbacks before they get it right. <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-control\/\">Inventory control<\/a> is difficult to manage, especially for fast-growing businesses.<\/li>\n\n\n\n<li><strong>Greater risk of supply chain failure<\/strong>: A delay in receiving stock or a breakdown in machinery could be detrimental to a company\u2019s supply chain and cause significant problems.<\/li>\n\n\n\n<li><strong>More planning<\/strong>: In order to do JIT right, companies must have accurate <a href=\"https:\/\/www.shipbob.com\/blog\/demand-forecasting\/\">demand forecasts<\/a> as well as real-time <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-tracking\/\">inventory tracking<\/a> and customer buying insights. A small miscalculation could have a large impact on operations.<\/li>\n\n\n\n<li><strong>Stockouts are more likely<\/strong>: Since the JIT system calls to only have just enough stock, it\u2019s possible for companies to run out if there is an unplanned surge in orders, making <a href=\"https:\/\/www.shipbob.com\/blog\/order-fulfillment\/\">order fulfilment<\/a> delayed.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-jit-inventory-for-ecommerce-stores\">JIT Inventory for ecommerce stores<\/h2>\n\n\n\n<p>JIT inventory systems are most commonly used in manufacturing, but there is the possibility of using the JIT method for ecommerce stores.<\/p>\n\n\n\n<p>By applying JIT, you could reduce stock levels within your <a href=\"https:\/\/www.shipbob.com\/blog\/differences-warehouse-fulfillment-center\/\">fulfilment centre<\/a> or stock room and only hold a specific amount of stock to fulfil orders in accordance with customer demand. This may also reduce the costs of raw materials, as you would only need to produce what is ordered.<\/p>\n\n\n\n<p>Implementing this inventory management system would enable your ecommerce store to reduce the chance of <a href=\"https:\/\/www.shipbob.com\/blog\/obsolete-inventory\/\">obsolete inventory<\/a>, potentially <a href=\"https:\/\/www.shipbob.com\/blog\/how-to-cut-costs-and-production-lead-times\/\">decrease production lead times<\/a>, and reduce the level of investment in working capital.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-tighter-control\">Tighter control<\/h3>\n\n\n\n<p>Ecommerce stores will have to control their supply chain management as much as they can to reach any sort of efficiency with JIT. They need to remain on top of orders and stock in order to effectively control their production process in line with JIT systems.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-a-greater-need-for-data\">A Greater need for data<\/h3>\n\n\n\n<p>Warehousing and <a href=\"https:\/\/www.shipbob.com\/inventory-management\/inventory-forecasting\/\">inventory forecasting<\/a> data is great if you use it correctly. Since JIT is completely reliant on your past supply and demand, you\u2019ll need real-time data to measure your needs or future inventory.<\/p>\n\n\n\n<p>Using an <a href=\"https:\/\/www.shipbob.com\/blog\/edi-shipping\/\">electronic data solution<\/a> (EDI) would enable ecommerce stores to manage inventory, improve efficiency, and control margins. EDI also allows stores to collect and transmit data accurately to make better forecasting predictions. The solution will automatically order new stock to <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-replenishment\/\">replenish inventory<\/a> levels once they hit a certain threshold with the agility and speed needed to satisfy consumer and retail needs.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.shipbob.com\/ecommerce-fulfillment\/\">Ecommerce fulfilment<\/a> providers like ShipBob also have technology that helps businesses with <a href=\"https:\/\/www.shipbob.com\/blog\/reorder-point-formula\/\">reorder point formulas<\/a> and real-time stock levels across fulfilment locations and SKUs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-make-your-ecommerce-supply-chain-jit-efficient\">Make your ecommerce supply chain JIT efficient<\/h2>\n\n\n\n<p>In order to effectively manage raw materials and <a href=\"https:\/\/www.shipbob.com\/blog\/stock-control\/\">control stock<\/a> levels, strong <a href=\"https:\/\/www.shipbob.com\/blog\/inventory-discrepancy\/\">supplier relationships<\/a> and accurate demand forecasting are needed. Below are some ways to make your ecommerce supply chain JIT efficient.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-solidify-your-logistics\">Solidify your logistics<\/h3>\n\n\n\n<p><span><a href=\"https:\/\/www.shipbob.com\/ecommerce-logistics\/inbound-outbound-logistics\/\">Inbound and outbound logistics<\/a><\/span> play a huge part in ecommerce stores and the ability to reach ecommerce JIT industry standards. The JIT methodology can be applied to any area of business, but transportation is a big one that can be continuously improved with shorter and more consistent transit times, better communication surrounding deliveries, and improved coordination.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-have-more-than-one-supplier\">Have more than one supplier<\/h3>\n\n\n\n<p>Having more than one supplier can ensure that you have enough inventory if something goes wrong. A common downside to JIT is that if a stock cannot be replenished quickly enough, it can lead to huge problems that affect the entire supply chain. To overcome this, ecommerce stores can use multiple suppliers to ensure they never incur such problems.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-outsource-fulfillment-to-a-3pl\">Outsource fulfilment to a 3PL<\/h3>\n\n\n\n<p>ShipBob empowers ecommerce stores by providing <a href=\"https:\/\/www.shipbob.com\/blog\/differences-warehouse-fulfillment-center\/\">fulfilment centres<\/a> that are near to their customers, tools that help to maintain control over inventory and orders, and proprietary <a href=\"https:\/\/www.shipbob.com\/warehouse-management\/\">warehouse management<\/a> technology that powers its fulfilment network.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"ShipBob Fulfillment Center Guided Tour - 3D 360\u00b0 VR Video\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/YdTbM4XlizY?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\">Conclusion<\/h2>\n\n\n\n<p>Just in Time inventory systems can help ecommerce stores reduce waste, space, and costs. However, your store will also need to be as agile as possible and have the capability of handling a shorter than average production cycle.<\/p>\n\n\n\n<p>While JIT is commonly used in regards to inventory management, the same principles can be applied to other areas of the <a href=\"https:\/\/www.shipbob.com\/blog\/supply-chain-optimization\/\">supply chain for optimizations<\/a>. Learn more about how ShipBob can help your business manage inventory and deliver orders quicker.<\/p>\n\n\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote\/\"><strong>Request a Quote from ShipBob<\/strong><\/a><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-improve-inventory-management-with-shipbob-s-wms\">Improve inventory management with ShipBob&#8217;s WMS<\/h2>\n\n\n\n<p>For brands looking to store inventory and fulfil orders within their own warehouses, <a href=\"https:\/\/www.shipbob.com\/product\/wms\/\">ShipBob&#8217;s warehouse management system (WMS)<\/a> can provide better visibility and organisation.<\/p>\n\n\n\n<p>Ecommerce merchants can now leverage ShipBob&#8217;s WMS (the same one that powers ShipBob&#8217;s global fulfilment network) to streamline in-house inventory management and fulfilment. With real-time, location-specific inventory visibility, intelligent cycle counts, and built-in checks and balances, your team can improve inventory accuracy without sacrificing operational efficiency.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.shipbob.com\/quote-plus\/\">Get ShipBob WMS Pricing<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Just in time inventory is a helpful practice for minimising inventory and waste in an organisation. How can JIT assist your ecommerce business?<\/p>\n","protected":false},"author":110,"featured_media":25146,"parent":0,"template":"","meta":{"content-type":"","inline_featured_image":false,"footnotes":""},"blogcategories":[8,11,15],"class_list":["post-703","blog","type-blog","status-publish","has-post-thumbnail","hentry","blogcategories-inventory","blogcategories-order-management","blogcategories-warehouse-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is JIT + How Ecommerce Benefits from Just In Time Inventory<\/title>\n<meta name=\"description\" content=\"Just in time inventory is a practice for minimizing inventory and waste in an organization. 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