What are the limitations of the JIT system?

The JIT system's limitations include dependency on suppliers, vulnerability to disruptions, and lack of surplus stock for unexpected demand.

The Just-in-Time (JIT) system, while efficient, is heavily dependent on suppliers. This means that if a supplier fails to deliver on time, it can cause significant disruption to the production process. The JIT system operates on the principle of receiving goods only as they are needed, reducing inventory costs. However, this leaves little room for error in the supply chain. If a supplier is late, or if there's a quality issue with the supplied goods, it can halt the entire production process. This dependency on suppliers can be a significant limitation, especially if there are few alternative suppliers available.

Another limitation of the JIT system is its vulnerability to disruptions. This could be anything from a natural disaster to a strike by workers. Because the JIT system relies on the timely delivery of supplies, any disruption can have a significant impact on the production process. For example, if a natural disaster affects the transportation of goods, it could delay production. Similarly, if workers go on strike, it could halt production entirely. This vulnerability to disruptions can be a significant drawback of the JIT system.

Finally, the JIT system does not allow for surplus stock to meet unexpected demand. Because goods are produced to meet actual demand, there is little to no surplus stock available. This can be a limitation if there is a sudden increase in demand that the company is unable to meet. For example, if a product becomes unexpectedly popular, a company using the JIT system may struggle to meet this increased demand. This lack of surplus stock can limit a company's ability to take advantage of unexpected opportunities for increased sales.