37 lines
1.4 KiB
Markdown
37 lines
1.4 KiB
Markdown
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<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-22 source=capital-and-inventory -->
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# Just-in-Time Inventory
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## Definition
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A capital management practice in which goods are received from suppliers
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only as they are needed for production or fulfilment, minimising the
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stock held at any moment. JIT eliminates inventory as a buffer by
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replacing it with reliable process coordination — synchronised production
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schedules, short lead times, and high-frequency deliveries. The capital
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released from inventory reduction is the primary financial justification.
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## Source
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Capital and Inventory in Supply Chain Management, §Just-in-Time Inventory
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## Supply Chain Domain
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Capital Management
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## VSM Assignment
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S3 — JIT is a management-level decision about how to deploy circulating
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capital. It sets the policy for inventory levels (near-zero) and enforces
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that policy through supplier relationship design and production scheduling.
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## WoN Concept
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Circulating Capital — Smith distinguishes circulating capital (consumed
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and replaced each productive cycle) from fixed capital (durable). JIT is
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an explicit strategy to minimise the circulating capital locked in
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inventory at any moment, accelerating the velocity of the capital cycle.
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The faster capital circulates, the greater the productive output per unit
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of capital stock — precisely Smith's argument for keeping circulating
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capital in motion rather than idle.
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