All You Need to Know About Just in Time Supply Chain

JIT or Just in Time supply chain is a process in manufacturing where materials are supplied only when the need arises. In general, companies have to store raw materials in warehouses, but with this process, there is no need to store materials in advance. Sourcing experts consider this to be important and the best outcome is achieved when operations are closely synchronized accordingly. Entrepreneurs rely on different supply chain methods to take their business to a new height, and in this blog, readers will know what the Just in Time supply chain is, how it works and what are the common issues.

Just In Time Method

Raw materials are most important for manufacturing businesses and the Just in Time supply chain is an approach to the business, where you can avoid increasing costs and unnecessary delays just by placing orders at the right time. A USA procurement expert says, the primary aim of this approach is to get rid of the trouble associated with storage and it helps to save the expenses. In case you are wondering how it works, think you won’t have to bear the expenses for storage anymore. In other supply chain methods, businesses rely on safety stock in case of emergency, but with JIT, businesses aim to synchronize the entire operation so that there’s no need for safety stocks.

How Does It Work?

Optimized supply chains aim to fulfill the demand of the consumers without spending a lot of money. Cost-cutting in a business is important, and JIT is one such tool that helps sourcing experts to reduce the cost in a unique way.

Although the approach seems interesting, it is not that easy to put into practice. In order to have the supply chain optimized, companies must fulfill the demand of the consumers whenever the need arises and companies have to spend a minimal amount of expenses on the same.

Communication plays a vital role in the JIT supply chain, and companies need to pay attention to ensure the smooth operation of the process. In most cases, it is impossible to deliver the item immediately, and therefore knowing your customers play a vital role in the process.

Common Issues

In case readers are thinking the JIT supply chain is hassle-free, it is not. Although companies can come up with a unique projection by reducing the cost of safety stocks and compressed lead time, sometimes companies have to spend on indirect costs on maintenance. While lower inventory costs and leaner lead times seem to be the biggest advantages, communication, and cost of indirect maintenance play a vital role.

In case of quality issues or production issues, JIT methods may face sudden challenges. Such conditions can lead to exceeding the original projections, which is a big challenge for the business. Aside from this, sudden fluctuations in demand may negatively impact the Just in Time supply chain, and the smooth operation is affected as a result.

In case you need further assistance, you can get help from a professional USA procurement expert and take the right step for your business.