Taking away a bit of Just-In-Time can safeguard your whole inventory

Original Content

One of the core tenets of globalisation has been Just-in-time (JIT) delivery, an inventory and supply chain management strategy that aims to increase efficiency by minimising inventory for business customers. And if recent supply chain disruption has highlighted anything, it is the brittle nature of JIT. Axis Communications’ Linn Storäng looks back at the key global supply chain challenges, and considers how organisations might strengthen their position to better meet demand in uncertain times.

undermined leaving businesses up and down the chain unable to provide the service that stakeholders demand, and struggling to meet the quality and timeliness standards that they expect of themselves.

While there are hopes of relief on the horizon, no business can afford to emerge from a rough road without learning from their experiences: now is the time to look critically at what recent years can teach us and build on those lessons to create a stronger future.

Some of these changes may seem contrary to the philosophy of JIT management, and in some ways they are – but they do not necessarily signal the end of JIT. They represent a softening of its edges.

Some of these changes may seem contrary to the philosophy of JIT management, and in some ways they are – but they do not necessarily signal the end of JIT. They represent a softening of its edges. Relying upon a supply chain structure which has proven itself susceptible to failure, facing an inability to deliver and the consequences which follow, is not something business should have to contend with again.

Scraping away a little of JIT’s bleeding-edge efficiency is vital if businesses are to face up to the difficulties of the modern supply chain, because any extra cost is fully offset by the potential ramifications of a supply chain failure.

Proper preparation sets businesses up to act more predictably and consistently keep their promises. Do that, and partners and customers come away with the best possible experience – and keep coming back.

Track, learn and improve

The recent challenges have highlighted the importance of the three ‘R’s – Resiliency, Robustness and Responsibility – and all businesses must ensure that they are invested in their execution of all three. Resiliency means building a shield to protect against tough times; Robustness demands that businesses and their partners are able to react quickly should that shield be breached;

and Responsibility acknowledges the place that all businesses have in the world, and encourages high quality products, a sustainable approach, and a culture of trust.

Multiple suppliers for component sourcing

Dual or secondary sourcing is one way to alleviate the potential of disruption. If a product requires specific components, for example, manufacturers should look to source them from more than one supplier. Building buffer stock of critical components, either within suppliers or in-house, ensures supply can be maintained even if there is unexpected disruption to the supply chain.

Businesses should not underestimate the levels of stock they may require.

Keeping sufficient components on hand to support manufacturing for a year, for example, may sound like overkill, but it both protects against supply chain issues and allows for sudden spikes in industry and customer demand to be met without overwhelming suppliers.

Working with several suppliers also allows for balance to be created. With proper coordination, suppliers with a surplus can aid those suffering a shortage, helping to maintain supply chain continuity for everyone.

Improve communication with key partners

It is all too easy to settle into comfortable working arrangements, but relationships with trusted partners must be consistently maintained and improved to ensure the best outcomes for all parties. In recent years the need for open and transparent dialogue has become more apparent. The left hand must know what the right hand is doing; involving one’s partners in discussions surrounding production, sourcing and manufacturing ensures nasty surprises are minimised.

A clear path to evolution

It should be clear that every business must face the realities of the modern supply chain if it is to grow. The world is volatile, and that is unlikely to change. In order to thrive, organisations up and down the chain must consistently evolve and seek improvements which leaves them more resilient, robust, and responsible. They must learn from difficult challenges and adapt their practices to neutralise future problems; build a culture of trust and communication which solidifies their position and lubricates the wheels of the supply chain; and nurture a spirit of close collaboration which helps them support and learn from key partners. ✷

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