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Buying only the smallest possible amount of goods to fulfill the current needs of the company. Other name could be "zero-stock". In its foundation it's for immediate use/consumption, not planned in advance.
Examples:
- for own needs: we don't keep spare office supplies/materials/goods/etc, we have just what we need at current time and is used by our staff. We order new only when we are done with what we have AND if there is a need for them.
- for production/sale: we don't keep anything in stock; once we receive order from customer - we buy what we need and start production.
Pros:
+ no stock space needed
+ limited waste
+ no obsolescence
+ no blocked capital in materials
Cons:
- possible production stop on shortage of materials
- possible higher cost of buying depending on the market of given materials (high/low season, availability, etc)
+/- but also the cost can be lower at certain times
