The consumer landscape is changing, nay, has changed. Same-day delivery, free shipping, and near instant access to more items than a brick and mortar store can hold, are all changing how customers and buyers think about vendors. A simple Google search for the “future of retail” yields thousands of results on current changes happening in retail and the impending doom for traditional store models. In order to compete with behemoths like Amazon, Wal Mart, and Target, medium-sized businesses (even most large) must reevaluate how they are storing, stocking, and shipping. Relying on the status quo in supply chain management means stagnation. For retailers and vendors stagnation means an inevitable demise. By introducing techniques from just in time inventory control and the pull method of distribution, businesses can pivot away from the abyss, and grow revenue in the years to come.

Here’s a rundown of just-in-time and just-in-case inventory control and the strengths and weaknesses of each approach.

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Benefits of Just in Time Logistics

Just in Time (JIT) logistics is the practice of having just enough inventory on hand to fulfill orders and keep your business running smoothly.

Advantages of JIT

Many companies adopt this strategy in order to reduce waste and cut down on manufacturing costs. JIT is a great way to ensure you’re not spending unnecessarily. If implemented correctly, practitioners of the just-in-time strategy create an incredibly efficient supply chain. Manufacturing, storing and shipping only when the company needs it most.

This efficiency means less “dead-stock.” You’ll have fewer items sitting on shelves or in your storeroom, taking up space, and aging as shoppers browse on by. You’ll have less inventory to warehouse and manage. Less time spent by your staff arranging and pulling unneeded stock. In addition, you’ll reduce costs for shipping back returns or obsolete items to your distribution centers. Less waste will help bolster your bottom line and keep your supply chain lean.

Just-in-Time logistics is completely demand-driven. If the demand isn’t there, your business won’t need to spend money on production and transportation costs. For small businesses, this is a great way to save money and gain a steady footing in the market. For companies who rely on selling a handful of one product, it is a great way to ensure revenue, without losing money on waste.

Using Just in Case and the Pull Method

If just in time is demand-driven and focused on efficiency, just in case (JIC) is for the companies trying to delight their customers. By building a just in case inventory, businesses can execute the pull method. Orders are fulfilled from satellite distribution centers where the stock can be greater than what a brick and mortar store can hold.

Advantages of JIC

As the retail industry scrambles to meet increased consumer expectations order fulfillment needs to be the top priority for businesses. Customers are no longer satisfied with waiting for their new widget to arrive. They want it now. If they aren’t able to find this satisfaction from your company, they will most likely try to find it at someone who can deliver. By establishing a network of strategic warehouses around markets and transportation hubs, companies can build a supply chain that meets the demand of consumers.

Just in case is an excellent solution for project management. Warehousing and storage for project phase planning can reduce your overall costs.  The experts facilitating your store remodel or refresh will have the materials they need at the right time. Working with a 3PL will ensure your projects run smoothly. In this case, the demand is certain. You know the number of materials you need. You even know when you’ll need them on the worksite. Employing a dedicated partner, with a team of experts managing transportation, makes project management easy.

 

The Way We See JIT vs. JIC Inventory Control

There is no single solution that will help all companies. Each supply chain – just like the businesses and the products they create – is unique. Although there are best practices that apply to every industry, our experts believe a strategic combination of both “just in time” and “just in case” will help companies become more efficient and win more loyal customers. Careful analysis of your data will reveal which products and which projects will benefit from each. Having a trusted 3pL partner who can objectively craft a unique solution for your business is a must. Depending on your industry and the size of your business, the demand-driven approach of JIT could help you become leaner and more profitable. If good project management and customer satisfaction is your goal, JIC could be an excellent solution for your business.

 

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