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Hybrid Supplier Solutions - Just in Time to Just in Case?

Author: Social Media/Monday, May 2, 2022/Categories: Blogs

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Just in Time.

Just in time (JIT) practices were introduced just after World War 2, initially within the automotive sector. The practice over time became an intrinsic part of manufacturers “Lean Manufacturing” techniques.

Rather than making large batches of parts at a time, automotive manufacturers sought to produce them at a rate that matched demand. Just-in-time was inspired by observing an American supermarket, where a customer took the desired amount of goods from the shelf and the store restocked with just enough to fill the space.

The original rationale for just-in-time: Catch quality problems early before you have a lot of defective parts made, lessen the risk of obsolescence. Don’t waste space storing and managing all that inventory, lessen the amount of cash tied up in parts and stock.

 

Just in Case.

Just-in-case (JIC) is a stock control method that involves producing or purchasing stock with excess, or buffer stock in place. This means that there is always stock available for the business if required. JIC is very useful when there is a shortage of a certain product, or a sudden increase in demand for a particular product.

The pandemic has shone a light on how globally interconnected supply chains and logistics are, and the weakness of a rigid JIT system. Many companies have been adversely impacted by not being able to locate or order parts, meaning their production slows or even worse has to temporarily cease.

 

Are hybrid solutions the way forward?

Many manufacturers have either reverted to holding buffer stock parts or as is more the case, asking suppliers to have more local warehouses and logistic facilities, thus keeping elements of a company’s JIT system operable.

Manufacturers, like the service sector, who utilise a hybrid work from home/ office base employee system, are seeing hybrid solutions as the way forward rather than one rigid system as the preferred solution. A mixture of JIT, JIC and last mile logistics abilities are the optimum solution, to ensure supplier parts and their companies cashflows are not severely impacted by local/ regional lockdowns or long-distance logistic disruption.

 

 

 

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