--- title: "What Is Just-in-Time Inventory?" url: https://www.uncap.com/glossary/just-in-time-inventory author: "Denis Dyli" published: 2026-10-28 updated: 2026-10-28 summary: "Just-in-time (JIT) inventory is a way of running stock and production so that only what is needed is made or supplied, when it is needed, and in the amount needed. It comes from the Toyota Production System, where Just-in-Time is one of two pillars, and it keeps a minimum stock that is refilled as it is used." --- # What Is Just-in-Time Inventory? > Just-in-time (JIT) inventory is a way of running stock and production so that only what is needed is made or supplied, when it is needed, and in the amount needed. It comes from the Toyota Production System, where Just-in-Time is one of two pillars, and it keeps a minimum stock that is refilled as it is used. **Just-in-time inventory**: Just-in-time (JIT) inventory is a way of running stock and production so that only what is needed is made or supplied, when it is needed, and in the amount needed. It comes from the Toyota Production System, where Just-in-Time is one of two pillars, and it keeps a minimum stock that is refilled as it is used. ## How it works Just-in-time inventory means supplying only what is needed, when it is needed, and in the amount needed. Toyota describes Just-in-Time as synchronizing production processes, linking all plants and their production processes in a continuous flow. Its plants follow three principles: - Need: only make what is needed by the customer, when it is needed, and in the amount needed. - Flow: don't allow goods and information to be held up during production. - Pace: make them at the pace at which they're sold. JIT does not mean zero stock. Toyota notes that a customer's order would take many months to fill if every part were made only after the order arrived. Instead, the minimum number of parts needed is stocked in advance, and each process refills only what the next process took. **The Just-in-Time pull loop Toyota describes** ### 1. Order, Customer order A customer order arrives, and the car can be built right away from parts stocked in advance on the assembly line. ### 2. Pick, Next process picks The next process picks up the parts it needs from the preceding process's store of finished products. ### 3. Refill, Preceding process replenishes The preceding process re-makes what was picked up before the next pick-up, from its own minimum stock. ### 4. Repeat, All processes loop Every process runs the same loop, so only what is needed, when it is needed, and in the amount needed is made. Supplier coordination is part of the design. Toyota says a car is made up of more than 30,000 parts, made at Toyota and at the plants of many business partners, and all plants must work in complete synchronization. ## Where JIT came from Toyota credits the Just-in-Time concept to Kiichiro Toyoda, the founder of Toyota Motor Corporation. Eiji Toyoda later realized the Toyota Production System through thorough implementation of jidoka and the Just-in-Time method. The system's stated objective is to thoroughly eliminate waste and shorten lead times. ## Just-in-time vs. economic order quantity The two answer different questions. Economic order quantity (EOQ) sets the order size with the lowest total variable cost to order and hold inventory. JIT refills only what the next step used, in the amount needed, from a minimum stock. ## Example A distributor supplies brackets to a manufacturer whose line uses 40 brackets a day, over 20 working days a month. - Monthly delivery: 40 x 20 = 800 brackets arrive at once, so up to 800 sit on hand right after each delivery. - Daily JIT delivery: 40 brackets arrive each day for that day's use, so stock on hand never tops 40. Both plans deliver the same 800 brackets a month. The JIT plan needs 20 deliveries instead of 1, and every one has to arrive on time. ## On Shopify Shopify's purchase orders record the commercial agreements you make with suppliers: products, quantities, costs, payment terms and supplier details. Shopify says you might use one to order new inventory from a supplier or keep accurate records of incoming inventory. After you mark a purchase order as Ordered, you can create an inventory transfer to track shipments and receive inventory. Shopify's Inventory remaining per product report divides each variant's ending quantity by its average daily sales over the last 28 days to estimate how many days of inventory remain before it runs out. ## How Uncap helps Toyota's second principle is that goods and information shouldn't be held up. [Uncap Connect](/products/connect) is the real-time data layer between Shopify, your ERP, and the warehouse floor: inventory, orders, customers, and pricing move the moment they change, not in an overnight batch. Its product page contrasts that with nightly batch jobs that leave the storefront a day behind what's actually on the floor. ## Related terms - Lead time - Safety stock - Vendor managed inventory (VMI) - Material requirements planning (MRP) - Economic order quantity (EOQ) ## Sources - Toyota: Toyota Production System - Shopify Help Center: Purchase orders - Shopify Help Center: Inventory reports ## Frequently asked questions ### What is just in time in SCM? In supply chain management, just-in-time means supplying only what is needed, when it is needed, and in the amount needed. Toyota applies it across its own plants and those of its business partners, which must work in complete synchronization. ### What is the difference between EOQ and JIT? EOQ is the order quantity with the lowest total variable cost to order and hold inventory. JIT supplies only what the next step needs, when it needs it, in the amount needed, refilling a minimum stock as it is used. ### Which companies use Just-in-Time? Toyota is the origin: Just-in-Time is one of the two pillars of the Toyota Production System, alongside jidoka, and Toyota says the system is pursued in all areas of the company.