Several clients are wondering, “Is JIT Dead?”. Definitely not. Just-in-time inventory planning is a best practice inventory management process. If you are literally ordering just-in-time from China and expecting to not experience disruptions without strategic stockpiles, capacity or agility built into the picture is not smart. On the other hand, if you are proactively managing inventory so that it arrives just-in-time because you have built a solid demand plan and are using proactive planning and scheduling practices along with strategic safety stock and/or kanban strategies to ensure your strategic items are available, it remains a solid approach to mitigate obsolete inventory and surplus inventory. Watch our video on JIT.
The bottom line is to utilize JIT concepts with an uncommon common sense approach. In essence, consider building relationships with your supply chain partners so that you can quickly manage changing conditions. Create a resilient supply chain, stay on top of changing customer demand patterns, build them into your replenishment process, develop backup sources of supply, and determine strategic inventory, capacity and/or resources to support your critical customers. Last but not least, design a SIOP (sales, inventory, operations planning) process to keep your demand and supply in alignment while improving your customer experience, profitability and cashflow.
If you are interested in an assessment of your demand planning, master scheduling, inventory replenishment and material requirements process to determine if a “smart” JIT approach would provide the win-win-win of improving the customer experience while increasing profit and cashflow, contact us.