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Just-in-time logistics shifting to ‘just in case’

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man reviewing logistics report in warehouse

The pandemic has fundamentally changed supply chains and how companies best serve their customers demands. Just-in-time logistics way of thinking is making a fundamental shift to just-in-case. But is it the right move for your company?

Many companies working in industries like the automotive and manufacturing sectors have built their operations around the Just-in-Time logistics approach. A methodology developed by the Japanese car industry back in the 1970s from the Toyota production system. The just-in-time – JIT methods reduce inventory and storage costs. But, in light of the ongoing global pandemic, that well-established logistics model has shifted on its axis.

For many companies, their business models are based on the management strategy of increased efficiency to reduce costs. The JIT system allowed for effective inventory management and reduces the amount of stock on hand. The system is reliant on a good supply chain of raw materials and goods to support its production process.

However, throughout all of the recent challenges of the pandemic, supply chain managers have been in the eye of the storm, working with issues that most of them had never seen before. Their desire to cut inventory costs has been overridden with the need to have a reliable supply to deliver goods to their customers.

Many companies supply chains, particularly those sourcing products and raw materials internationally, have felt the pressure of the interrupted supply of goods directly affecting their output to their customers.

Initially, customers were compassionate and understanding of the challenges, but 12 months or more later, their sentiments are shifting. Companies are seeking to purchase from suppliers with guaranteed on-time delivery and it’s becoming a competitive advantage if your company is able to deliver consistently.

While just-in-time logistics methodologies ruled the roost as the prevalent method for many operations and logistics managers, the supply chains are now shifting to a ‘Just in Case’ logistics strategy.

Supply chain managers are reviewing their management strategy and Just-in-Case is becoming their preferred method in the current economic climate.

In this Information Guide, we provide you with insights and considerations between just-in-time and just-in-case models and what they can mean for your business. We walk you through some considerations you need to be aware of for your warehouse design and layout.

Download your Information Guide now.

 

 

You may also be interested in reading:

Warehouse Operations: Optimising Your Receiving Process

Are Drive-in & Drive-Thru Racks Increasing Your Cost

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