NOT too much, not too little.
We've heard of this wisdom being said time and time again. Wastefulness is a mortal enemy of a productive business.
Whether it is wastefulness in overproduction, waiting or transportation time, processing or inventory waste, waste of motion or waste from product defects, it cannot be denied that waste entails cost.
Without proper monitoring and management, it can hamper efficient operations and has the capacity to financially cripple a company.
Lack is also not good for business. The inability to provide clients or customers with what they need immediately is a sure way to drive them away and into the waiting arms of a competitor.
Being able to give customers products and services they want and need while saving money and reducing waste, has become a top priority for thriving businesses.
In the early 1970s, manufacturing giant Toyota developed and perfected within its plants a means of meeting consumer demands with minimum delays, called JIT or Just In Time.
Taiichi Ohno, considered as the father of JIT, helped Toyota meet the increasing challenges for survival through an approach that focused on people, plants and systems.
Soon many Japanese manufacturing companies applied the philosophy that, when properly adapted to organizations, substantially strengthened competitiveness in the marketplace by reducing wastes and improving product quality and efficiency in production. (www.ifm.eng.cam.ac.uk)
As explained by Miranda Brookins, "Just-in-time inventory systems let small business owners produce products after they receive a request from customers, rather than having already assembled products on the shelves waiting for purchase."
Some examples of just-in-time inventories that may be applicable to your business are:
Gift Basket Drop-Shipping
Here, a business owner could partner with a drop-ship gift basket company and place orders as they arrive. This way the business can avoid having inventory on hand and order simply based solely on customer demand.
Fast-Food Restaurants
Fast food restaurants have cheese, burger patties and all the fixings and toppings on hand, but they don't start assembling and cooking their hamburgers, sundaes or fish sandwiches until a customer places an order.
Florist
Once an order is place, instead of reaching into inventory that's been sitting, the florist can visit a nearby flower shop or flower mart to pick up the flowers needed to make the arrangements.
Print-on-Demand Publishing
Many authors, across various genres, forgo the traditional approach to securing book deals and self-publish their work. Self-published authors can take advantage of just-in-time inventory by working with a printer that offers print-on-demand services. Print-on-demand companies don't print the books until a customer places an order.
Computer Manufacturers
Rather than a warehouse filled with pre-assembled computers, the companies places orders for computer parts as customers make purchases. The computer firms by their parts from various suppliers.
(www.smallbusiness.chron.com)