Why change the inventory level? This is about the significance of low inventory to enterprises. Holding inventory has advantages and disadvantages.
(1) The benefits (functions) are as follows: meet the expected customer demand, shorten the order lead time, smooth the production demand such as seasonal inventory, share the order cost, prevent the shortage of resources, avoid the price increase, prevent the product from being out of stock, separate the operation process and prevent the production interruption.
(2) Disadvantages (problems): capital cost, space occupation and covering up other problems in enterprise management.
Low inventory is conducive to giving full play to the role of inventory and reducing the problems caused by speed.
Just in time (JIT), also known as Toyota's mode of production, refers to the production of necessary products or parts according to the necessary time and quantity, but the products that are temporarily unnecessary are produced too early. This is an order form, and now many brands are like this. Place an order in advance and then deliver it, and the cycle is generally about 3 months.