What does the term "Just-in-time" refer to in supply chain management?

The term "Just-in-time" in supply chain management refers to a method of inventory management that aims to reduce waste and increase efficiency by receiving goods only as they are needed in the production process. This approach minimizes the costs associated with holding large inventories, such as storage and insurance costs, while also reducing the risk of obsolescence.

By implementing Just-in-time practices, companies can respond more rapidly to customer demand, producing only what is necessary at the right time, thereby improving their overall operational efficiency. This approach fosters closer relationships with suppliers as it relies on precise timing for deliveries, ensuring that materials arrive just in time for production without delays or surplus inventory.

The other options, though related to business processes, do not accurately define Just-in-time within the context of supply chain management. A sales strategy focuses on how products are sold and marketed. A quality assurance program centers around maintaining the quality of products or services. A sourcing strategy involves the processes of finding and acquiring goods and services but is not specifically tied to the timing or management of inventory in the same way that Just-in-time is.