The just-in-time delivery (JIT) process within supply chain management, also called “lean manufacturing”, is used by industries that produce, hold, sell and move inventory. This method determines that when demand for product is created, inventory is “pulled” rather than the historical model where inventory or products are “pushed”. Orders for replacement supplies are then placed after consumption. This means that inventory is received and delivered as needed, rather than being pushed through.
Why Use Just-In-Time Delivery?
Companies who employ production lines, maintain raw materials and other inventory will benefit by the use of JIT delivery by reducing held inventory and warehouse storage costs. Many 3PLs will receive, store, and then ship items when needed which helps to preserve their client’s working capital. Only when the item has been paid for and shipped will the company have an expense. This is a significant advantage as companies strive to spend available funds for growth and more strategic needs. Because delivery speed and dependability are ever-increasing competitive standards, utilization of the 3PL experts who specialize in just-in-time delivery will ensure greater customer satisfaction.
Examples of Services Offered
Some of the JIT delivery services and benefits a quality JIT delivery provider will offer are:
Expert customer service
Time and place definite delivery
Timely and accurate shipment tracking
Close proximity of support facilities
Shortened lead times
Flexibility with scaling
Ability to maintain low inventory
Just-in-Time Delivery Examples
Examples of business sectors which have profited from the use of just-in-time delivery include the auto industry — the most notable leader being Toyota who revolutionized this method in the 1950’s. Only when orders are received from a client and a car is ready to be built, then does Toyota receive raw materials on their production floor. In doing so, holding inventory is minimized which leads to lower costs.
After World War II, Harley Davidson was able to use JIT to reduce inventory while increasing productivity. After experiencing a low efficiency process, Harley Davidson turned to JIT delivery methods. After doing so, inefficiencies were identified and solved and as a result, lead times were reduced. Additionally, after implementing just-in-time delivery, inventory levels declined by as much as 75% while productivity rose. Similarly, Dell Computer and Apple have been industry leaders expertly utilizing this strategy for decades.
Successful deployment of a JIT delivery model does necessitate the use of dependable, synchronized communication systems and partners, as well as accurate forecasting of supply and demand. Whether you are in the market of retail, technology, manufacturing, military contracting, or other movers of critical goods, it is crucial to maintain your customer relationships while protecting your scarce resources of money and time by partnering with just-in-time delivery experts. If you are considering partnering with a 3PL that provides JIT delivery services, NewStream Enterprises, LLC has the expertise to deliver your inventory accurately and on time while helping you to avoid the waste of overstocked inventory cost and underutilized space.