22. Just-in-Time, Not Just-in-Case Inventory Efficiency

A series about business efficiency, finding profit and how to get there

Introduction
There’s something comforting about a well-stocked storeroom. Full shelves feel like control. Like preparation. Like safety.

But in reality, excess inventory is often a silent thief. It ties up cash you could use elsewhere. It takes up space you could repurpose. And worst of all, it often reflects fear - not strategy.

Welcome to the world of just-in-case inventory. It’s not lean. It’s not efficient. And in most cases, it’s not necessary.

The alternative? A just-in-time approach - smarter ordering, tighter controls, stronger supplier relationships and real-time data that lets you respond to demand, not guess at it.

You don’t need to run a warehouse to benefit from this mindset. Whether you sell physical goods or rely on parts, packaging, or consumables, moving from just-in-case to just-in-time could unlock thousands in working capital and hours of wasted time.

Actions to Be Taken
Here’s how to shift toward just-in-time thinking in a way that’s realistic for SMEs.

Audit What You’re Holding
Start with a simple stocktake -

• What items are sitting unused or slow-moving?

• How many months of supply do you have for your top 10 items?

• How often does inventory need to be discounted, written off, or cleared?

 The goal is to identify excess, redundancy and misaligned ordering habits.

Classify Inventory by Importance and Movement
Use the ABC method -

• A items High value, low quantity - strict controls, reorder quickly

• B items Moderate value, moderate turnover - balance efficiency and availability

• C items Low value, high quantity - automate or bulk order carefully

 This helps prioritise what really matters and avoid over-managing the wrong stock.

Tighten Your Reorder Points
Set minimum and maximum levels for each item. Avoid ordering “just to be safe.” Base it on -

• Usage rates

• Lead times

• Criticality of the item to operations

 Use basic inventory software (or spreadsheets with alerts) to trigger reorders based on actual data, not gut feel.

Strengthen Supplier Relationships
Just-in-time doesn’t work without supplier reliability. So -

• Negotiate shorter lead times or smaller, more frequent orders

• Build trust with key suppliers

• Have backup options for critical items (this is your just-in-case plan — not your shelf)

Make Inventory Everyone’s Business
Train your team to -

• Handle stock properly

• Report low levels early

• Avoid hoarding “just in case”

• See inventory as cash on a shelf, not clutter in a cupboard

Psychological Perspective
Overstocking is often rooted in fear. Fear of running out. Fear of letting a customer down. Fear of not being prepared.

But this fear creates a false sense of control. Because while you may avoid the odd stockout, you’re absorbing ongoing costs - in cashflow, storage and waste.

Just-in-time requires a mindset of trust - in your systems, your data, your team and your suppliers. It’s a move from hoarding to planning, from panic to purpose and like all things in efficiency, it’s a process - not perfection. Start small. Tweak. Improve.

HR Best Practice
Inventory inefficiency often reflects communication issues, not just systems problems.

HR can support by -

• Encouraging cross-functional collaboration (sales, ops, admin) on stock decisions

• Reducing blame culture when items run low and focusing on system improvement

• Helping frontline staff understand how stock impacts profitability and job security

• Incorporating inventory training into onboarding where relevant

 and importantly listening. Staff often know what’s inefficient, they just haven’t been asked.

Red Flags to Watch For and Mitigate Against
Inventory is draining cash if -

• Stock regularly expires, gets damaged, or is discounted to clear

• Storage areas are cluttered, chaotic, or overflowing

• You’ve ever said “we’ve got too much of that, but not what we need”

• Orders are placed manually, without usage data

• You’ve made purchasing decisions “just in case” more than once this month

 These are not strategic decisions - they’re reactions. And they add up fast.

Narrative Story Meet Logan from Tauranga
Logan runs a small manufacturing business supplying specialty furniture fittings. For years, he over-ordered stock based on instinct. His storeroom was packed. His cashflow was tight. And his team constantly chased down the right parts.

He finally did a full inventory audit. Discovered -

• 20% of his stock hadn’t moved in over 12 months

• Thousands tied up in hardware they barely used

• Repeated orders placed because no one trusted the system

He invested in a simple inventory tool, cleared old stock and worked with suppliers on smaller, faster shipments.

Within three months -

• Freed up $18,000 in working capital

• Reduced average stockholding by 35%

• Improved on-time delivery, thanks to better visibility

Logan reflects - “I thought full shelves meant safety. But the real safety came from clarity — not clutter.”

Golden Nugget
“Stock on the shelf is cash out of reach - efficient inventory is about confidence, not accumulation.”

If you’d like a confidential, free of charge, free of obligation conversation about your business, here’s how to get me.

 📞 Phone +64 275 665 682
✉️ Email john.luxton@regenerationhq.co.nz
🌐 Contact Form www.regenerationhq.co.nz/contact

If you’d like to read more RegenerationHQ thinking on SME business and other things, go here – www.regenerationhq.co.nz/articlesoverview

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