Recently, global supply chains are being stretched thin more than ever by the impact of the Coronavirus (Covid-19) outbreak. Therefore, posing the question, is it time to rethink the way we trade?
Just in Time (JIT) delivery was first introduced in Japan over 60 years ago, innovating manufacturing and reducing waste by cutting out excess inventory.
JIT delivery and the supply chain
JIT delivery acts to minimise disruption while maintaining minimal inventory and ensuring that goods are delivered on time. Businesses looking to improve responsiveness and reduce costs in their supply chain benefit from developing collaborative partnerships with experts in JIT delivery services, rather than attempting it alone.
The basic idea of JIT delivery is avoiding waste. By having suppliers deliver parts to the assembly line a few hours or days before they go into the end product, businesses don’t pay for what they don’t use. They save on warehouses and the people to manage them.
However, as supply chains get more global and businesses increasingly rely on single suppliers, the system has grown brittle.
The end of JIT delivery?
The issue with JIT delivery is that the suppliers have to be as flawless as the JIT production facility. Meaning they have to provide inventory and/or raw materials on time, every time. With strict quality controls and ordering only what was necessary, upstream suppliers were held fully accountable to ensure the successful operation of JIT. Factories no longer had months of inventory on hand, some reduced to days or even hours. Therefore, meaning that the smallest delay or quality issue could cause lines to grind to a halt.
However, no one could have predicted the havoc that Covid-19 would have caused. Countries faced lockdowns, social distancing, quarantines, self-isolation, and illness, and as a result capacity in production facilities was greatly reduced or even halted.
Global freight has been desperately trying to stay afloat throughout the pandemic. However, the impacts of not only Covid-19 but also Brexit are continuing to be felt with container shortages, vessel delays and blank sailings as shipping lines work to reposition their fleet. Freight costs have soared to astronomical heights. With no let-up in sight, companies scramble to secure what little space there is regardless of cost.
The covid-19 pandemic has exposed the fragility of companies’ JIT supply chain. Therefore, highlighting the reality of the results and costs of failure. Many have put continuity and scenario planning, and the restructuring of the overall supply base, front and centre of their priorities.
Not all companies have the time or resources to invest in this planning. Many are struggling to recover and thus the battle to keep their heads above water continues.
Re-evaluating risk
The risks of JIT delivery have become more visible and the costs of failure more prominent. Industry leaders have noted the crisis “will accelerate increased supply chain transparency, deeper business continuity and scenario planning as well as restructuring of the overall supply base.” Specifically, there will be increased focus on technological aids to reduce risks and manage supply chains better.
Despite JIT being under strain, the cost efficiency it offers is such a powerful driver that it’s not going to go away. Instead, the challenge is who is going to be responsible for filling in the gap between just-in-time and just-in-case. Importantly, there simply isn’t enough margin in many supply chains to do away with JIT delivery and its overall efficiency.
Goudsmit UK
Goudsmit UK have the resources to assist with effective planning of JIT delivery for our customers. We can offer a lot of the benefits of JIT delivery without the associated risks.
At Goudsmit UK, our supply chain management system is oriented to meet your complete satisfaction. Our ability to understand customer requirements and match them with the right solutions enables us to provide the most cost-effective logistics solutions.
We will manage your order from start to finish. Assisting with demand planning and forecasting, manufacturing in larger batches and consolidating freight to help keep costs down. Whilst offering storage options in Europe, UK, and Northern Ireland to have stock on hand ready for immediate dispatch.
Utilising a computerised system, we will keep you informed as your order progresses. From confirmation of our order and expected delivery dates, through to dispatch information and delivery tracking, our modern distribution network guarantees your parts where you want them, when you want them.
For more information view our project management web-page or download our brochure.
Contact our team on 02890 271 001 or email us at info@goudsmit.co.uk.
