Just In Case (JIC)

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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated September 30, 2020

What is Just In Case (JIC)?

Just In Case (JIC) is an inventory-management method whereby materials, goods and even labor are on hand so they are there when needed in the production process. The method is generally the opposite of the Just in Time (JIT) inventory method, whereby materials, goods and even labor are scheduled to arrive or be replenished only exactly when needed in the production process.

How Does Just In Case (JIC) Work?

JIC is a traditional inventory-management system referred to as a "push" system, whereas JIT is often referred to as a "pull" system.

JIC is helpful because it avoids a crisis if demand is higher than expected. In order to employ JIC effectively, however, a company must still forecast demand. JIC also allows companies to offer more options compared to companies that use JIT (which relies heavily on standardization for efficiency).

JIC incurs the added expense of housing idle materials and can increase the costs associated with defective products, wasted space, extra equipment, overtime, warranty repair and scrap.

JIT works best for companies using repetitive manufacturing functions: Hospitals, small companies and other entities may find JIC much more feasible.

Why Does Just In Case (JIC) Matter?

The JIC method is controversial because it requires companies to keep more inventory on hand, which incurs loss risks, storage costs and other expenses. It may also mean getting fewer volume-buying discounts, but it ensures that the company can almost always fill an order and it is less exposed to work stoppages from suppliers.

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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Just In Case (JIC), then please ask Paul.

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