The speed at which products are delivered is getting more scrutiny every day. Consumer demand for next-day and same-day deliveries are driving this focus on speed. Just-in-time (JIT) delivery is an inventory management strategy that facilitates faster order fulfillment with applications in raw material ordering and manufacturing. It’s a strategy that aligns raw material orders directly with production schedules by using truckload freight or LTL—whichever is most effective. Companies use this approach to increase efficiency and decrease waste by ordering goods only as they need them. How does just-in-time delivery affect your supply chain? We will explore it here.
What Does JIT Delivery Require?
By reducing the number of raw materials being held, JIT delivery helps improve profits. The services involve the process of producing and delivering finished goods at the time of sale. The company will only take in parts or materials at the time they are needed for assembly or manufacture. This helps them save on inventory costs, cycle counts, and secured space for all the extra pieces. Supply chain assembly operations don’t store materials in on-site warehouses, opting instead to order them and have them delivered via truckload freight and leaving the storage to someone else. JIT logistics allow supply chain management companies to save on the costs and keep more dynamic supplies in that space. That means the companies making those deliveries have a tight window to make the drop.
What Are the Effects?
Just-in-time delivery affects the supply chain by making forecasting difficult. Manufacturers—even ones that don’t use JIT—must forecast what their future needs will be. They make models, crunch the numbers, and try to figure out what they will need in the coming weeks and months related to materials. Demand forecasting will always be secondary to customer wants and needs, but it’s an important aspect of the supply chain. Customers value flexibility and quick response time in their JIT delivery service providers. It is an industry that must be able and willing to make last-minute changes and move quickly. The goal of any optimized supply chain is to deliver to the customers what they want as soon as possible, all while spending as little money as possible. JIT is just one tool that some supply chain professionals use to get that done. Just-in-time—when it works correctly—can compress time and reduce cost. It’s up to you, your customer, and your suppliers to make it work.