Just in time inventory: what a 200-SKU store can borrow from it
Just in time inventory means ordering so stock lands close to the moment you need it, rather than holding weeks of cover on a shelf. For a small store the strict version is out of reach, but the timing discipline behind it is not, and that is the part worth taking.
What just in time inventory means
Just in time inventory is a method where stock is ordered to arrive close to the moment it is needed, so that very little sits idle between delivery and sale. The idea comes out of manufacturing, where a plant pulls parts to the line against a known production schedule instead of stacking them in a warehouse. The money saved is the money that would otherwise be frozen in boxes.
For a Shopify store the word translates badly, because you have no production schedule. You have demand, which arrives when it arrives, and a supplier who ships when they ship. So the small-store version of just in time is narrower: hold less cover, and make up the difference with better timing.
A worked example
Take one SKU, a candle, selling roughly 4 units a day. Your supplier takes 14 days from purchase order to pallet on your floor. Lead time demand is 4 times 14, so 56 units. A strict just in time reading says order 56 units the day you hit 56 on hand, and the new stock meets the last unit of the old.
That works until the supplier slips three days, or a newsletter doubles sales for a week. Then you are sold out and the pallet is in transit. The pure method has no slack in it, and a small store has nothing to absorb the miss.
Why a small store cannot run it pure
Three things in the way, and none of them are fixable with software.
- You do not control the lead time. A factory running this method contracts suppliers into the plan. You email a supplier and wait. Sea freight, customs and a maker's own queue all move your date without asking.
- Minimum order quantities fight you. Frequent small orders are the engine of the method. If your supplier's minimum is 250 units and you sell 4 a day, every order is two months of cover whether you want it or not.
- A miss costs more than a pause. A stopped production line is caught up on the next shift. A sold-out product page sends the shopper somewhere else, and you may not get them back.
So treat it as a direction rather than a target. Less cover is good. No cover is a gamble on a supplier you do not control.
Pure just in time against what a small store can run
| Question | Pure just in time | What a small store can run |
|---|---|---|
| When do you order? | As the line consumes parts, against a fixed schedule | When stock crosses a reorder point you set per SKU |
| How much cover do you hold? | Hours or days, by design | Lead time demand plus a buffer you choose |
| Who controls the lead time? | A supplier contracted into the plan | A supplier who ships when they ship, sometimes by sea |
| How big is one order? | Small and frequent | Whatever the minimum order quantity forces, often a month or more |
| What does a miss cost? | A paused line, caught up on the next shift | A sold-out page and a shopper who buys elsewhere |
What to borrow from it
Order on a trigger, not a calendar
A monthly ordering habit ignores how fast each SKU actually moves. A reorder point fires when that SKU is the right number of days from empty, which is the one honest trigger.
Think in days of cover, not units
Sixty units means nothing on its own. Sixty units at 4 a day is fifteen days, and if your lead time is 14 days you are one slipped shipment from empty.
Size the buffer per SKU, not per store
A steady staple needs less cushion than a SKU that spikes on every campaign. A single store-wide minimum overstocks half the catalogue and underprotects the rest.
Count the cash sitting on the shelf
The real appeal of the method is working capital. Every extra week of cover is money you cannot spend on the next product, so hold the cushion deliberately rather than by habit.
Watch the fast movers hardest
Tight timing is worth the attention on the handful of SKUs that carry your revenue. The long tail can sit on generous cover and cost you very little.
Related terms
Just in time sits on top of four numbers, each with its own page in this glossary.
- Lead time. Days from your purchase order to stock you can sell. You supply it, because no sales data can infer it.
- Sales velocity. Units per day over a chosen window. The window you pick decides whether a campaign spike or a quiet fortnight dominates the number.
- Reorder point. Lead time demand plus a buffer. This is the trigger that replaces the calendar.
- Safety stock. The buffer itself, and the direct opposite of running lean. Pure just in time drives it towards zero; a small store should not.
Two neighbouring methods are worth reading against this one. Min/max levels are the fixed-threshold cousin, simpler to set and blind to a change in sales rate. Economic order quantity answers a different question, not when to order but how much, and it is the one that collides with your supplier's minimum order quantity.
Questions
Can a small Shopify store actually run just in time inventory?
Not in its strict form. You do not set your supplier's lead time, minimum order quantities push you towards larger and less frequent orders, and you have no production schedule to pull against. What you can run is the timing half of it: order on a per-SKU trigger instead of a monthly habit, and keep only the cover you have decided you need.
Does just in time mean carrying no safety stock?
The method pushes buffers towards zero, which is why it needs reliable suppliers and predictable demand. A small store usually has neither, so the sensible reading is a smaller buffer held on purpose rather than no buffer at all. Size it against how much your supplier's dates slip and how spiky that SKU is.
What is the difference between just in time and min/max levels?
Min/max sets a fixed floor and ceiling in units and reorders when you hit the floor. Just in time works from the rate of consumption and the lead time, so the trigger moves as sales move. Min/max is easier to write down and goes wrong quietly when a SKU speeds up.
What do I need before I can time orders this way?
Two numbers per SKU. Sales velocity, which is units per day over a window you choose, and lead time in days for the supplier who fills that SKU. Multiply them for lead time demand, then add the buffer you are willing to hold.
Is running leaner cheaper?
Less stock on the shelf frees working capital and cuts what you spend holding it, so the pull is real. It also removes the slack that absorbs a late shipment, so the saving is traded against a higher chance of running out. Which side wins depends on your suppliers, and it is your call rather than a formula's.
Can Restoc do this for me today?
Not yet. Restoc is pre-launch, so there is nothing to install at the moment. The waitlist is the way to hear first.