Evolving market conditions make effective inventory management a challenge for many manufacturers.
According to the U.S. Bureau of Transportation Statistics (BTS), transportation costs have been steadily rising since 2023, with prices climbing 1.9% between July 2024 and July 2025. As noted by McKinsey, tariffs are also a growing concern, with 82% of companies saying that their supply chains are affected by tariffs.
Two common inventory management strategies are just-in-time (JIT) and just-in-case (JIC). Here’s what you need to know about how these strategies work, the benefits and trade-offs of each, and how manufacturers often combine them in practice.
What is just-in-time (JIT) inventory management?
Just-in-time inventory management minimizes storage by receiving materials as needed, “just-in-time”, to meet consumer demand.
Characteristics of JIT inventory strategies include:
- Focus on minimizing inventory and waste
- Close coordination with suppliers
- Emphasis on efficiency and flow
What is just-in-case (JIC) inventory management?
Just-in-case inventory management sees companies holding buffer stock to protect against disruption. If supply chains are interrupted, manufacturers still have materials on hand to meet production demands.
Typical traits of JIC strategies include:
- Focus on availability and risk mitigation
- Higher inventory carrying costs
- Increased operational flexibility during disruptions
Key differences between JIT and JIC inventory strategies
The primary difference between JIT and JIC strategies is material availability. JIT approaches rely on suppliers and logistics to ensure delivery of materials for immediate use. JIC frameworks, meanwhile, keep stock on hand to minimize the impact of supply chain disruptions.
Other differences include risk exposure and cost structure. JIT frameworks reduce inventory and carrying costs but increase reliance on supplier reliability, raising the risk of stockouts. JIC frameworks, by contrast, reduce disruption risk by holding buffer inventory, but require higher ongoing storage and carrying costs. Batch vs. continuous manufacturing processes also play a role; JIT frameworks are typically used for batch production, while JIC often applies to continuous operations.
Aspect | Just-In-Time (JIT) | Just-In-Case (JIC) |
Definition | Inventory arrived exactly when needed for production, minimizing stock levels | Maintains excess buffer inventory to cover potential supply disruptions or customer demand surges |
Key components | Precise supplier coordination, frequent small deliveries and lean production scheduling | Safety stocks, higher reorder points and diversified suppliers for redundancy |
Advantages | Reduces holding costs, waste and storage needs; improves cash flow and efficiency | Protects against delays, shortages and volatility; ensures continuous production |
Disadvantages | Vulnerable to supply chain disruptions; requires perfect timing and reliable partners | Ties up capital in inventory; risks obsolescence, spoilage and higher storage costs. |
Best suited for | Stable demand, reliable suppliers and just-in-time manufacturing processes | Unpredictable markets, long lead time, perishable goods or global supply chains |
Risk level | High, such as stockouts from delays | Lower, such as overstock risks |
Focus | Agility | Resilience |
Benefits of just-in-time inventory management
There are several benefits of JIT inventory management, including:
- Reduced inventory carrying costs
- Improved cash flow
- Less waste and obsolescence
- Streamlined operations
JIT strategies work best in stable, predictable environments and for products that rely on perishable or time-sensitive materials.
Consider a company that makes mounting brackets for construction equipment. Demand for these brackets is steady and stable. The company doesn’t receive unexpected orders that require thousands of brackets to be made and shipped overnight. Here, JIT makes sense because brackets can be made-to-order with stock on hand. Storing additional materials is not necessary or cost-effective.
Food processing is also well-suited to JIT strategies. This is because required materials spoil after a set amount of time, and products can only stay fresh for so long. Carrying extra inventory leads to material waste, while producing additional stock creates product waste.
Benefits of just-in-case inventory management
Choosing a JIC strategy also comes with advantages, such as:
- Increased supply chain resilience
- Reduced risk of stockouts
- Better protection against supplier disruptions
- Improved service levels during volatility
Selecting a JIC strategy is often the best choice for companies that operate in high-uncertainty environments that can experience sudden spikes in customer demand or unexpected supplier shortfalls.
For example, a pharmaceutical manufacturing firm can benefit from having additional stock on hand to meet unexpected demand for medication.
Risks and limitations of each approach
Both JIT and JIC strategies come with risks and limitations.
JIT processes are vulnerable to supply chain disruptions due to weather or geopolitical events. They’re also highly dependent on supplier reliability. If suppliers promise delivery on a specific date but can’t meet this expectation, manufacturers are left without the materials necessary for production.
JIC, meanwhile, comes with higher inventory carrying and storage costs. These costs can be amplified if product demand takes a sudden downturn. In addition, JIC strategies can lead to the obsolescence of inventory. For example, if a manufacturer builds buffer material stock for a specific product but this product is replaced by a newer version that doesn’t use the same materials, existing stock may become obsolete.
Selecting the right strategy means understanding the trade-offs. Is greater efficiency worth the risk of production line disruptions? Is improved resiliency worth the cost of overstocked or obsolescent inventory?
The impact of equipment reliability on inventory strategy
Equipment reliability also plays a role in selecting the right inventory strategy.
For JIT to be effective, manufacturers need highly reliable production assets. Even small amounts of unplanned downtime can lead to backlogs that prevent businesses from reaching production targets.
JIC, meanwhile, can mask issues with reliability. If companies carry buffer materials and greater amounts of finished products, teams may not notice discrepancies between target cycle times and operational data.
As a result, industrial asset management and maintenance maturity become key factors in strategy selection. Companies that have well-established preventive and proactive maintenance strategies along with clear production scheduling processes are better equipped to deploy JIT frameworks with confidence and ensure that JIC strategies accurately reflect production line performance.
Hybrid inventory strategies in modern manufacturing
JIT and JIC are not mutually exclusive. While many manufacturers prefer one strategy over the other, companies often see benefits when these approaches are combined.
Here are three ways to use JIT and JIC in tandem.
- Apply JIT to predictable items: Most manufacturers produce a combination of predictable and unpredictable demand items. By applying JIT to predictable products, it’s possible to free up inventory space, reduce carrying costs and improve production leveling.
- Use JIC for critical or high-risk materials: Some materials are higher-risk than others. Metals and minerals often fall into this category; issues with sourcing or geopolitical tensions can result in a sudden shortage with no definite timeline for resolution. Here, the extra stock afforded by JIC can help offset risk.
- Segment inventory based on risk and criticality: Finally, it’s worth taking the time to segment inventory based on potential sourcing and shipping risks using digital inventory management tools and MRO storeroom best practices. JIC is ideal for variable-cost, high-risk materials, while JIT makes sense for steady-cost, low-risk components.
Leveraging JIT and JIC where they make the most sense in production processes can help companies both improve efficiency and build resilience.
Data and visibility as enablers of smarter inventory management
Data is the foundation of any effective inventory strategy. Visibility comes next; data is only useful when organizations can track where, when and how data was collected.
Utilizing data offers several benefits for inventory management, such as:
- Real-time insight into inventory levels and demand spikes
- Improved supply and demand forecasting accuracy for more accurate stocking
- Better coordination across supply chains and operations
- Support for proactive inventory adjustments
Choosing the right inventory strategy for your operation
There is no “best” inventory strategy. Instead, it’s about finding the right strategy for your operation. To determine your primary inventory management model, consider these five factors:
- Demand variability across products and customers
- Supplier reliability and lead times
- Equipment reliability and maintenance maturity
- Cost tolerance and risk appetite
- Regulatory requirements and customer satisfaction
The most important rule when selecting a strategy? Align inventory practices with operational realities using production monitoring and manufacturing capacity analysis. This provides the baseline for inventory best practices. If the variability of supply and demand is high, consider JIC. If demand is predictable and maintenance practices are mature, a JIT system may be a good starting point.
The most important lesson for ongoing inventory efficacy? Use data-driven decision-making to determine next steps. If data reveals changing demand patterns, consider incorporating JIC to reduce risk. If improved maintenance strategies are improving machine uptime, moving some processes to JIT can reduce total costs.
Bottom line? Supply and demand aren’t static. As a result, continuous evaluation and evolution of inventory strategy is required to balance cost, risk, efficiency and resilience.
Enhance your maintenance maturity with ATS. Let’s talk.
References
Bureau of Transportation Statistics. (2025, August 14). Transportation producer price index – July 2025. U.S. Department of Transportation. https://www.bts.gov/newsroom/transportation-producer-price-index-july-2025
McKinsey & Company. (2025, December 2). Supply chain risk survey. https://www.mckinsey.com/capabilities/operations/our-insights/supply-chain-risk-survey
