While JIT inventory offers many benefits, it also presents several challenges, particularly for startups and small businesses:
Supply Chain Reliability: JIT relies heavily on the reliability of suppliers. Any delays or disruptions can halt production and impact delivery schedules. Demand Forecasting: Accurate demand forecasting is crucial. Inaccurate forecasts can lead to stockouts or excess inventory, negating the benefits of JIT. Initial Implementation Costs: Transitioning to a JIT system may require significant investment in technology and training. Risk Management: Entrepreneurs must develop contingency plans to mitigate risks associated with supply chain disruptions.