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Inventory management is one of the toughest duties and it gets tougher when it comes to managing inventory for FMCG products. There are many traditional systems of managing inventories and the latest approach is called the Just In Time (JIT). This approach however would only work well with the manufacturers. For a wholesaler or a retailer this doesn’t work at all.

The concept of J.I.T. is very good. It covers a large area like internal expenses but ignores demand. Following J.I.T. means the demand should be controllable. Keeping customer’s satisfaction as a primary moto this J.I.T. doesn’t work.

For an instance, a bike manufacturing company follows J.I.T. One of the authorized dealer of the same motorcycle orders two hundred units of ABC model. The manufacturer dispatches the said motorcycles with a stipulated time. Lets say the deal had been made on 1^st of January and the dispatch made on 1^st October. Now the dealer sold 125 units of the ABC model and the demand for this ABC model has decreased. Customers want a new model BCD. The customer’s choice varied in just three months. Now the dealer wants other models and orders the manufacturer to make some 50 motorcycles. The manufacturer will not produce the model because their lead time hasn’t quite finished and the quantity is not big. This is when the dealers get into trouble. Either sell the same old model ABC or let customers choose other models of other manufacturers.

This is why J.I.T. doesn’t apply well for re distributors or stockiest or whole seller. It works well only with manufacturers.