AQA · GCSE · Business

    Course version: 8132 · Version from Sept 2017

    The role of procurement: Just in time (JIT)

    Just in time (JIT) is a stock management method in which materials and components are ordered so they arrive just as they are needed for production or sale, rather than being held in a warehouse.

    Checked against the AQA 8132 specification (opens in a new tab) on .

    • Point 3 of 21
    • 4 key terms

    Study notes

    From the checked teaching notes for this specification point.

    The idea

    Just in time (JIT) is a stock management method in which materials and components are ordered so they arrive just as they are needed for production or sale, rather than being held in a warehouse. It links closely to procurement because the business must build strong relationships with reliable suppliers who can deliver quickly and consistently. Holding minimal stock reduces the capital tied up in inventory and cuts storage, insurance and waste costs, since goods are less likely to be damaged or become obsolete. However, JIT leaves little margin for error: a late delivery, supplier failure or unexpected surge in demand can halt production and lose sales. It therefore suits businesses with dependable suppliers and predictable demand.

    What earns the marks

    • States that JIT means stock arrives just as it is needed, so minimal stock is held.
    • Explains the link to procurement: reliable suppliers and good supplier relationships are essential for JIT to work.
    • Explains a cost benefit, such as less capital tied up in stock or lower storage, insurance and waste costs.
    • Explains a risk, such as production stopping, lost sales or customer dissatisfaction if deliveries fail or demand rises.
    • Applies JIT to a business context, judging whether its suppliers and demand pattern make the method suitable.

    Common mistakes and how to put them right

    • Confusing JIT with just in case stockholding, where buffer stock is deliberately kept.

      Put it right by stressing that JIT holds minimal stock and relies on timed deliveries.

    • Assuming JIT always cuts costs.

      Put it right by noting that frequent small deliveries can raise ordering and transport costs and that failure risks are serious.

    • Treating JIT as only a production technique.

      Put it right by linking it to procurement and supplier relationships, as the specification does.

    Exam tips

    • Learn a short definition plus one benefit and one risk so you can answer definition and analysis questions quickly.
    • When a case is given, name the business's actual suppliers or products to show application rather than generic theory.
    • For longer answers, structure your response as benefit, risk, then judgement so nothing important is missed.

    Try the lesson

    The start of the The role of procurement: Just in time (JIT) lesson, made from checked teaching notes for this specification point.

    Have a go first

    Which description best explains just in time (JIT) stock management?

    Listen

    Just in time (JIT) is a stock management method in which materials and components are ordered so they arrive just as they are needed for production or sale, rather than being held in a warehouse. It links closely to procurement because the business must build strong relationships with reliable suppliers who can deliver quickly and consistently. Holding minimal stock reduces the capital tied up in inventory and cuts storage, insurance and waste costs, since goods are less likely to be damaged or become obsolete. However, JIT leaves little margin for error: a late delivery, supplier failure or unexpected surge in demand can halt production and lose sales. It therefore suits businesses with dependable suppliers and predictable demand. A strong answer earns marks for these points. States that JIT means stock arrives just as it is needed, so minimal stock is held. Explains the link to procurement: reliable suppliers and good supplier relationships are essential for JIT to work. Explains a cost benefit, such as less capital tied up in stock or lower storage, insurance and waste costs. Explains a risk, such as production stopping, lost sales or customer dissatisfaction if deliveries fail or demand rises. A common slip: Confusing JIT with just in case stockholding, where buffer stock is deliberately kept. Instead, stressing that JIT holds minimal stock and relies on timed deliveries. Exam tip: Learn a short definition plus one benefit and one risk so you can answer definition and analysis questions quickly.

    See it

    A top-down flowchart. It starts with a node labelled "Order materials and components", which leads to "Deliveries arrive just as needed". From there, one branch goes to "Minimal stock held", which splits into "Less capital tied up in inventory" and "Lower storage, insurance and waste costs". A second branch goes to "Relies on reliable suppliers", which leads to "Strong supplier relationships". A third branch goes to "Little margin for error", which splits into "Late delivery or supplier failure" and "Unexpected surge in demand"; both of these lead to "Production halts and sales lost".
    It shows how just in time ordering leads to minimal stock and lower costs, while depending on reliable suppliers and carrying risks of production halting and lost sales.

    Key words

    Say what each word means before you turn the card.

    Just in time (JIT)

    Try answering aloud or in your head before turning the card.

    Procurement and supplier relationships

    Try answering aloud or in your head before turning the card.

    Cost control and working capital

    Try answering aloud or in your head before turning the card.

    Operational risk and business resilience

    Try answering aloud or in your head before turning the card.

    See every definition
    Just in time (JIT)
    A stock management method in which materials and components are ordered so they arrive just as they are needed for production or sale, rather than being held in a warehouse.
    Procurement and supplier relationships
    The link to procurement means the business must build strong relationships with reliable suppliers who can deliver quickly and consistently.
    Cost control and working capital
    Holding minimal stock reduces the capital tied up in inventory and cuts storage, insurance and waste costs.
    Operational risk and business resilience
    A late delivery, supplier failure or unexpected surge in demand can halt production and lose sales, so it suits businesses with dependable suppliers and predictable demand.

    Label the diagram

    Some boxes have lost their names. Pick the right name for each number.

    The diagram again, with 3 boxes numbered instead of named. A top-down flowchart. It starts with a node labelled "Order materials and components", which leads to "Deliveries arrive just as needed". From there, one branch goes to "Minimal stock held", which splits into "Less capital tied up in inventory" and "Lower storage, insurance and waste costs". A second branch goes to "Relies on reliable suppliers", which leads to "Strong supplier relationships". A third branch goes to "Little margin for error", which splits into "Late delivery or supplier failure" and "Unexpected surge in demand"; both of these lead to "Production halts and sales lost".

    • 1Box 1

    • 2Box 2

    • 3Box 3

    0 of 3 labelled

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