Just-in-Time vs Just-in-Case: The Mistakes Organisations Make Choosing Between Them
Just-in-time inventory management held an unchallenged reputation for decades. Lean, efficient, low-waste — it was the model global supply chains were built around. Then came a sequence of disruptions that exposed the fragility of pure JIT: pandemic-related shutdowns, container shortages, port congestion, and semiconductor scarcity. The response in many organisations swung hard toward just-in-case: build buffer stock, carry safety inventory, protect continuity at all costs. Both approaches, applied without discipline, create problems. The organisations that manage supply chain risk well are the ones that understand which items need JIT thinking and which need JIC thinking — and avoid the common mistakes that muddle the two.
Mistake 1: Treating JIT and JIC as an Organisation-Wide Choice
JIT and JIC are item-level strategies, not enterprise-level policies. Applying one model uniformly across your entire inventory is the first and most expensive mistake. High-volume, predictable, commodity items with reliable local suppliers are natural JIT candidates. Low-volume, critical, long-lead-time, or single-source items are JIC candidates. An ABC analysis of your inventory — sorting by volume, criticality, and supply risk — should drive the classification, not a blanket policy set in a board meeting.
Mistake 2: Ignoring Demand Variability When Classifying Items
JIT works when demand is predictable and supply is responsive. The moment either condition breaks down, JIT becomes a liability. Many organisations classify items as JIT candidates based on average demand without examining the variability around that average.
An item with average weekly demand of 100 units but a standard deviation of 80 is not a JIT candidate, regardless of what the average says. The variation is what matters.
In 2022, demand variability increased in most sectors as supply chains reconfigured. Items that were stable JIT candidates before the pandemic are not necessarily stable JIT candidates now.
Review demand variability — not just average demand — when classifying inventory for JIT or JIC treatment. Coefficient of variation is a straightforward metric to use.
Further Mistakes That Undermine the Decision
Confusing JIT with cost-cutting. JIT is a flow-management discipline, not a cost-reduction programme. Teams that implement JIT primarily to reduce inventory investment, without redesigning the upstream supply relationships and lead times that make JIT viable, get the worst of both: low inventory and frequent stockouts.
Not adjusting JIC levels to actual risk. Just-in-case does not mean carrying unlimited buffer. Every JIC item should have a defined safety stock level, calculated from demand variability, lead time, and acceptable service level. Organisations that set JIC safety stocks by gut feel or "let's double the order" carry far more inventory than the risk justifies.
Failing to revisit the classification when supply conditions change. Item classifications are not permanent. A previously JIT item whose supplier base has concentrated, or whose lead time has doubled, may need reclassifying as JIC. Build a trigger-based review into your inventory policy — for example, any item whose lead time increases by more than 30 percent gets reclassified automatically.
Overlooking the carrying cost of JIC inventory. Organisations that swung aggressively to just-in-case after supply disruptions are now in some cases sitting on excess inventory they cannot move, with the associated carrying costs, obsolescence risk, and working capital tied up. JIC is not free. Each item's holding cost needs to be weighed against the disruption cost it prevents.
XNM helps public-sector and capital-project clients build procurement and supply chain frameworks that balance efficiency with resilience. Reach out to XNM's procurement, sourcing & contract management team to strengthen your inventory strategy.