In a JIT system, you would replace it with an on-hand replacement. If that specific part has been designated as a part that is carried further down the supply chain, then you issue the request for the part and get it later that day or the next day. As time goes on, parts that are kept on-hand that are not being used would be placed further back in the supply chain. Conversly, those that are being frequently used are kept on-hand or have thier on-hand quantities increased. JIT isn't a reduction in quantity, its a reduction in the items that are not being used. Thats what they mean by eliminating "waste".

By reducing the stocks, companies reduce cost. In combat logistic terms, the main cost driver is transport. JIT 'Reduces the cost' by reducing the transport load. The traditional mode was appropriate when transport costs and scale econemies were high, and information about stocks was transferred slowly In combat logistics, the transport cost remains high, but there are no scale econemies. And information can move extremly quickly, in that an order can be placed, filled and en route by them time the parts demanded are en route as well. So it makes more sense to ship only as desired.

The theory is great. However, if your 2nd or 3rd line supply depot is back home in the factory it takes a hell of a long time to get it to the correct place. The British have a problem with this as they do not have adequate control over their contractors. For example, I fix a truck. The truck needs a new transmission unit. Simple, you say pull another out of 1st line spares (Unit lines). Problem, none there waiting on 2nd line (Brigade/Div lines). Big problem. Units ordered and are on a boat from the UK. Boat cannot get through due to poor weather. Parts not available. This is where the system has broken down. Initial planning has meant that regiments are waiting on kit from the suppliers that has said "yes, we can supply at X days rediness". Due to their need to win contracts and cut costs, etc. Can't do it. Planning needs to establish parts required = X, X days delivery time. = X number or units need to be held at each unit. Problem also come from, people on the ground have experience of the system not working, put in huge demands for kit to compensate, which gets sent to them. If every unit does this the chain breaks and the supplies go to the wrong place.