Reasons for preference of JIT purchasing models

  1. Reduced inventory levels: JIT purchasing facilitates reduction in inventory levels and the associated inventory holding costs
  2. Improved lead: Time reliability compared to traditional purchasing approaches, delivery lead time under the JIT system is considerably shorter. This implies higher levels of customer service and lower safety stock requirements for the company.
  3. Scheduling flexibility: JIT emphasizes scheduling flexibility by aiming for reduced purchasing lead times and set up times
  4. Improved quality and customer satisfaction: JIT purchasing results in improved quality and corresponding levels of higher customer satisfaction
  5. Reduced costs of parts: As cooperation and relationships between suppliers and manufacturers build up in a JIT system, so do the opportunities to conduct an extensive value analysis and focus on reducing the cost of parts purchased
  6. Constructive synergies with suppliers: A lean purchasing program involves close technical cooperation with suppliers. This particularly means the cooperation between manufacturing and design engineers. Because of small lot sizes and frequent delivery schedules, suppliers are in position to receive quick feedback regarding any potential manufacturing or design problems. Also manufacturing is in a position to implement engineering changes quicker because of the reduced inventory levels
  7. Meeting customer demand in a timely manner
  8. Providing products at the lowest possible total cost
  9. Enhancing customer loyalty and satisfaction
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