just-in-time (jit)

Just-in-time (JIT) is an inventory management strategy that minimizes stock levels by receiving materials and components only when needed for production, reducing waste and carrying costs. JIT principles: (1) Pull system—production triggered by demand, not pushed by forecast; (2) Continuous flow—minimize batch sizes and queue times; (3) Takt time—match production pace to customer demand rate; (4) Kanban—visual signals trigger replenishment when inventory reaches reorder point; (5) Supplier integration—close coordination for frequent, reliable deliveries. JIT in semiconductor fab: (1) Chemical delivery—automated chemical delivery systems with tank-level monitoring and auto-replenishment; (2) Gas supply—bulk gas contracts with on-site storage and telemetry monitoring; (3) Spare parts—critical spares stocked on-site, non-critical ordered JIT; (4) Wafer starts—release wafers based on customer demand pull. JIT benefits: (1) Reduced inventory cost—less capital tied up in stock; (2) Less waste—materials don't expire or become obsolete; (3) Quality improvement—smaller lots enable faster defect detection; (4) Space savings—less warehouse space needed; (5) Cash flow—pay for materials closer to revenue generation. JIT risks in semiconductors: (1) Supply disruption—no buffer for unexpected shortages (2021 crisis exposed this); (2) Lead time variability—equipment and material delays break JIT; (3) Single-source dependency—sole suppliers create fragility. Post-2021 shift: industry moving from pure JIT to "just-in-case" for critical materials—strategic stockpiles of key chemicals, gases, and spare parts. Hybrid approach: JIT for commodity materials with reliable supply, strategic inventory buffers for critical or sole-sourced items. Balance between inventory efficiency and supply chain resilience is now a strategic priority.