If you’re new to the idea of just-in-time logistics services, the basic concept is to align manufacturing, fulfillment, and shipping timelines with customer demand to reduce waste. In most cases, it can help you target your business goals more quickly. Businesses that implement it can see as much as a 9 percent increase in profit margins. Sounds great, right? Good. But before you get started implementing JIT logistics principles, there are a few more things worth knowing:
It Can Save You Time, Money, and Hassle
When implemented properly, a JIT supply chain can create a lot of tangible value. Optimizing your logistics plan to have freight arrive on schedule as customers need it can minimize your warehousing costs and streamline your distribution routes, meaning reduced fuel costs. The techniques for a smooth warehouse operation reduce headaches and errors as do often-implemented supply chain automations that connect demand forecasting and automatic reorder points to align manufacturing and distribution.
It Requires Excellent Inventory Management
Minimizing the waste of safety stock and overstock is kind of the whole point of a just-in-time supply chain. So, you can’t rely upon these classic techniques to manage your inventory with a lot of leeway, but you don’t want to be losing out on potential sales due to short stock. If your current team is still utilizing beginner principles and you’re hoping to upgrade your logistics planning, it may be time to make a change. Just be sure you know what to look for in a new inventory management partner.
It Can Give You Useful Customer Insights
The key to implementing a JIT logistics plan is having access to accurate customer demand forecasting. 3PLs utilize historical consumer data for your business and the industry at large and other factors like seasonality and economic conditions to create a schedule for manufacturing and distribution. But these logistics IT solutions also provide excellent information that can improve your business planning as well. Many JIT supply chains create ABC priorities for products and give an executive team data that can help you plan for new product launches, reinvestment opportunities, and more.
It’s a Journey, Not a Destination
JIT logistics is all about reducing waste at every step of the supply chain—logistics, manufacturing, warehousing, fulfillment, and distribution. It’s a lot to take on. Working with a well-seasoned 3PL that focuses on just-in-time solutions can get you 80 percent of the way there quickly, but it’s important to bring an attitude of continual improvement. Supply chains change with time—as do technology, techniques, consumer habits, and business focuses. Each of these creates new opportunities to improve your JIT supply chain.
It’s Not the Right Option for Every Business
For some business models and industries, a JIT supply chain with absolutely minimal safety stock or strict manufacturing deadlines doesn’t work. But each logistics plan can be customized to your business’ needs. Taking advantage of the JIT principles that do work for your business can still make an enormous difference in your customer satisfaction and your bottom line. Working with a logistics partner who can help you pinpoint the difference will fast-track your success.
Taking advantage of just-in-time logistics planning can move the needle on profits and positive customer brand experience for your business so long as it’s tailored properly. Working with a team of experienced logistics planners can create opportunities for you to do more with less.