What is the basic idea behind jit procurement? What is the difference between it and traditional procurement methods

The basic idea of jit purchasing is to deliver the right product, in the right quantity and at the right price, to the right place at the right time. The best to meet the needs of the user just-in-time procurement and just-in-time production as well.

Difference with the traditional way:

One, the principle of different

1, jit purchasing: just-in-time purchasing is a direct demand-oriented purchasing model, it is purchased to send credit is sent directly to the point of demand.

2, traditional procurement: the basic function of procurement, is to help people from the resource market to obtain the various resources they need.

Two, the way different

1, jit procurement: rational selection of suppliers, and establish a strategic partnership with them, requiring suppliers to enter the manufacturer's production process. Small lot purchasing. Realize zero or less inventory. Delivery on time, packaging standards.

2. Traditional Purchasing: According to the determined supply agreement and terms, as well as the enterprise's material demand time plan, in the form of a purchase order to the supplier to send demand information, and arrange and track the entire logistics process, to ensure that the material arrives at the enterprise on time, in order to support the normal operation of the enterprise's process.

Three, the advantages and disadvantages of different

1, jit procurement: can effectively overcome the shortcomings of the traditional procurement, improve the efficiency and quality of material procurement, but also can effectively improve the management level of the enterprise, for the enterprise to bring great economic benefits.

2, traditional procurement: is to fill the inventory, and a certain amount of inventory to cope with the enterprise demand, in order to ensure the normal operation of the enterprise production and management and cope with a variety of uncertainties in the material procurement process (such as changes in the market, material shortages, transportation conditions constraints, etc.), often produces a large number of raw materials and purchased parts inventory.

Baidu Encyclopedia - JIT Procurement

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