Under the JIT philosophy, why is inventory often said to be evil?

Just-In-Time (JIT) philosophy is a management approach that aims to minimize inventory levels and waste while maximizing efficiency in the production process. It originates from Japan and is one of the primary principles of Lean Manufacturing. The main goal of JIT is to produce only the required items, in the required quantities, and at the required time.

Inventory refers to the raw materials, work-in-progress (WIP), and finished goods that are held by an organization to fulfill customer demand. Traditional production systems usually prefer to have larger quantities of inventory to ensure that production can continue without interruptions due to shortages of materials. However, the JIT philosophy challenges this approach and views inventory as an unnecessary cost.

Inventory is considered evil in JIT philosophy due to several reasons: 1. High holding costs: Holding inventory requires investment in storage space, insurance, security, and management. These costs can be minimized or eliminated by reducing inventory levels. 2. Obsolescence: Products or materials have the risk of becoming obsolete or spoiled over time. Higher inventory levels increase the likelihood of obsolescence and consequently, loss of investment. 3. Wastes resources: Excessive inventory levels tie up resources that could be used elsewhere in the business. These resources include money, time, and labor, which could be redirected to more productive activities. 4. Hides inefficiencies: Large inventory levels can mask underlying inefficiencies in the business processes, such as poor forecasting, low productivity, and operational issues. With JIT, such inefficiencies are quickly exposed and can be addressed. 5. Delays problem-solving: When excess inventory is available, it can give organizations a sense of security, causing them to postpone dealing with issues such as supplier reliability or production bottlenecks. JIT philosophy forces organizations to confront and solve these problems immediately, leading to continuous improvement.

In JIT philosophy, inventory is considered evil because it adds to the cost, wastes resources, and hides inefficiencies. By minimizing inventory levels, JIT promotes a leaner and more efficient production system, aiming to ultimately increase overall cost savings and productivity. Organizations that successfully implement JIT can benefit from improved cash flow, faster response times, and enhanced competitiveness in the market.