Recent decades have witnessed the establishment and persistence of just-in-time (JIT) manufacturing practices across industries. Since inventory management practices correlate with manufacturing methodologies, JIT inventory management, including JIT delivery, has also become common practice in many modern businesses.
Just-in-time delivery offers several benefits to companies, with the primary goals of reducing cost and waste in supply chains and increasing customer satisfaction. JIT delivery plays a vital role in lean manufacturing practices and just-in-time supply chain management generally. Here, we’ll examine some of the benefits of just-in-time delivery to help you determine whether or not it would suit your business goals. Should you decide that just-in-time delivery is right for you, Upper Route Planner can help you implement a system that will grow and streamline your business’s operations.
Table of Contents
Just-in-Time Manufacturing: The Basics
Understanding just-in-time delivery requires understanding its role in JIT manufacturing, a widely adopted methodology pioneered at Toyota and closely related to lean manufacturing. Just-in-time manufacturing is oriented toward cost reduction, manufacturing efficiency, and increased customer satisfaction. It has one relatively simple objective: to ensure that an operation has just the right amount of materials on hand to manufacture the products that will ensure customer order fulfillment.
Traditional Manufacturing vs. JIT Manufacturing
Manufacturing anything complex requires that parts of various types (from various suppliers) are immediately available in the right numbers. Traditional manufacturing companies would achieve this by having shipments of necessary parts arrive in large volume at the manufacturing operation site. Workers would then process and move the parts into warehouse storage. When parts were needed for manufacturing, they would be located by workers in the warehouse, and the correct number of parts would be transported to the assembly line to be used in the manufacturing process.
JIT manufacturing experts recognize that there were many inefficiencies in this kind of process. Workers, for example, were required to handle each shipment at least twice: when it arrived on-site and when it was needed at the assembly line. If materials could be moved directly from the shipment receiving area to the assembly line, worker efficiency would be increased. The housing of supplies in a warehouse also required resources to store, maintain, and keep track of large amounts of materials and components. Cutting those costs out of the picture would likewise increase efficiency and cash flow.
The Importance of Supply Chain Logistics and Inventory Management
A focus on a lean manufacturing operation makes salient the importance of inventory management and supply chain logistics. Implementing a JIT system requires a very detailed understanding of supply chains and inventory control for any given production process.
Most complex production processes require multiple kinds of materials from different suppliers and are needed at different times during a production run. The ideal embraced by JIT inventory management, of reducing on-site inventory and storage costs, requires that every link in the supply chain is synced. The right amount of raw materials needs to be precisely where it is supposed to be and should, ideally, get there “just in time” to be used in production.
One key aspect of understanding the JIT concept is this: customers drive inventory management. Your job as a company is not to push as many products onto the market as possible. It is, instead, to respond to customer demands. The just-in-time concept lets the customer “pull” manufacturing processes along (with all the supply chain and inventory requirements undergirding manufacturing coming along for the ride).
The Benefits of Just-in-Time Manufacturing
The goal of JIT manufacturing is to ensure that businesses have only the supplies they need on-site to manufacture products for customer order fulfillment. Because just-in-time manufacturing relies heavily on supply chain logistics, it requires just-in-time inventory management. The benefits of JIT inventory management are clear.
- Waste reduction: Avoid unused, out-of-date, or obsolete inventory. Avoid overproduction.
- Efficiency: Minimize excess stock and man-hours spent processing inventory.
- Cost reduction: Don’t spend on inventory that isn’t actively involved in production. Save on payroll.
- Improved production processes: Develop a fuller understanding of your supply chain to improve production and quality assurance processes.
- Improved customer satisfaction: Provide customers with high-quality finished products more quickly than traditional manufacturing processes.
The Role of Just-in-Time Delivery in Inventory Management
Just-in-time inventory management critically relies on dependable just-in-time delivery methods. Complex supply chains have many moving parts, connecting suppliers, manufacturers, and customers. A crucial aspect of supply chain logistics is syncing delivery schedules with production runs. This is the core of JIT delivery.
Demand Forecasting Plays a Central Role in Just-in-Time Delivery
Basic economic theory says that accurate demand forecasting plays a crucial role in understanding supply chain dynamics. Demand forecasting is vitally important for determining where manufacturing components need to be and when.
Demand can change quickly and unexpectedly. Accordingly, some amount of flexibility needs to be built into supply chains. Unexpected issues can arise that might affect supply chain dynamics. Supplies may need to arrive on very compressed timelines in specific locations unexpectedly due to customer demand. Price variability within the market for raw materials may significantly impact demand (and hence margins).
JIT supply and inventory services designed to cope with changing demand forecasts cannot be brittle: flexibility is key. Companies need to be able to deal with exigencies of various types. Though there are other essential aspects of flexibility in supply chain logistics, like changes in the volume or type of components needed for production, the delivery itself is key. Accurate demand forecasting and flexibility, and responsiveness are crucial for implementing a successful JIT delivery system.
The Benefits of Just-in-Time Delivery Services
Just-in-time delivery can aid businesses in multiple ways:
- Is a key contributor to maintaining minimal inventory requirements for business operations, an essential feature of JIT inventory management.
- Ensures that warehouse space needs are greatly reduced, freeing up space for other essential business operations.
- Results in a shortened production run so that shipping can happen more quickly.
- Eliminates the need for workers to perform inventory-related tasks so that a workforce can reorient toward manufacturing- or production-related tasks.
How to Implement Just-in-Time Services Successfully
Supply chain management and logistics are important but often overlooked aspects of any successful company’s business model. Several crucial considerations must be taken into account if a business hopes to implement just-in-time inventory management, including just-in-time delivery successfully.
- Just-in-time inventory management is directly related to how many products are currently circulating in the market. JIT services must be responsive to changes in demand.
- Information is key for accurate demand forecasting. A successful company must have a good idea about market demand for products. A successful business must also have the infrastructure and relationships that enable sharing information with other stakeholders in the production process. There are many links in the supply chain, and clear communication is a must.
- Any efforts that can be made toward decreasing reliance on manual inventory management and auditing are crucial for speed and efficiency. The use of a computerized inventory database is the bare minimum for modern companies. Other technologies in this area, such as RFID asset tracking, might also be deployed to improve inventory management processes.
- Reliability is important in supply chain logistics. A successful business must, of course, create reliably high-quality products. The importance of implementing good QA processes cannot be overstated. Companies are also required to judge their suppliers and other production-related partners’ reliability to ensure the smooth flow of parts and materials through complex supply chains.
- Implementing across-the-board JIT inventory management may also require training personnel to adapt to new and changing business models or technology.
Upper Route Planner Can Help Implement Just-in-Time Delivery for Your Business
If your business decides to implement a JIT delivery system, route planning and optimization will undoubtedly play a big role. The Upper Route Planner app will benefit the delivery side of any JIT inventory management business plan.
Proper JIT delivery scheduling must ensure that materials and parts get where they need to be precise when they need to be there. Temporal syncing and accuracy of scheduling between stakeholders are paramount. The Upper Route Planner app has several features that ensure the reliability of scheduling and delivery, route planning for delivery drivers, and information sharing between stakeholders to promote communication and transparency.
Upper Route planner enables quick and efficient address inputs to make delivery more manageable, including bulk imports from excel as well as smart address input technology to reduce errors. The software promotes smart and fast route planning with tools enabling quick route creation as well as duplicate and customizable routes. The Route Planner also provides data-rich reports designed to give you the insights into business operations you need to make the best decisions for route optimization, efficiency, and savings. Upper offers 24/7 international customer support services.
Upper Route Planner is an indispensable tool for just-in-time delivery.