Just in time (JIT) is a system of supplying goods as close as possible to when they are actually needed.  For a company that resells, that means goods arrive just before hitting the shelves for customer purchase. For a manufacturing company, it means parts and raw materials arrive just before they are added to the final product. Keeping less inventory on hand means a company has more available cash and credit for other uses.JIT requires the constant and precise monitoring of demand. This is done with the use of "Kanban" - signals between various points of production which can alert when the next part or product is needed. Kanban help facilitate the continuous objectives of streamlining, efficiency and improving quality - all of which are key goals of JIT.  For retailers, overestimation of demand results in bloated inventories and a reduction in profits due to markdowns.  Underestimation results in empty shelves and lost sales. For a manufacturer, underestimation is the main problem.  Without necessary materials, production stops and the manufacturer is unable to deliver goods as promised.  Just in time inventory management is facilitated by electronic inventory systems.  These allow a business to better monitor the inventory and respond more rapidly when it gets low.  Some just in time systems are so good that a product is not even manufactured until the consumer buys it.  Prior to these systems, businesses had to keep higher inventories just in case there was an unanticipated spike in demand.