Braking News

Content for Drivers

Just-in-Time versus Just-in-Case Inventory Management: Is it Time for a Shift?

Just-in-time versus just-in-case inventory management being discussed in a warehouse

Just-in-Time (JIT) is a system for managing inventory where goods or materials are obtained only when they are needed from suppliers in an effort to reduce the cost of holding inventory. Alternately, Just-in-Case (JIC) is an inventory management method where large inventories are held to prevent running out-of-stock. This method weighs the higher cost of holding inventory against the benefits of customer satisfaction and retention. Advances in technology leading to changes in manufacturing, fulfillment, distribution, and last mile delivery fostered a marketplace where Just-in-Time made sense. However, disruptions to that marketplace including raw material delays, labor shortages, and shifts in demand from historical data may motivate a shift from our previous model of choice. Today we post the question: Does Just-in-Time still make sense in today’s marketplace? 

History of Just-in-Time (JIT)

The principle of Just-in-Time Inventory originated in Japan with the Toyota Motor Company. Inspired by the efforts of Taiichi Ohno, the system was launched in the 1950’s to handle batch sizes and parts in construction assemblies. It revolutionized production and demand, and resulted in smaller work-in-process inventory. Inventory costs were reduced as inventory turnover increased. Ultimately, the JIT model changed how supply chains ran, paving the way for further improvements. Lean processes resulted, and organizational silos were knocked down.

Shifts in Supply Chain Factors

Global manufacturing and distribution benefited from Just-in-Time for decades.  However, much of that success relied on enabling factors that existed during those times. Fast forward to the 2020’s. Assumptions and factors from previous decades that made JIT work no longer hold. Historical data, demand patterns, and process times have been disrupted by factors, such as COVID-19, economic uncertainty generated by geopolitical concerns, and evolving consumer behaviors. In our recent Pace Logistics Lab post, The Revival of Sales and Operations Planning, we discuss the many short and long-term benefits of adapting to marketplace shifts.

A change in mindset from Just-in-Time to Just-in-Case may offer a solution. Business success has always hinged on recognizing changes in the market and adapting accordingly. Managing inventory and manufacturing processes in today’s environment may benefit from a Just-in-Case mindset. Even though a JIC model necessarily carries a higher inventory cost than JIT, the cost increases associated with Just-in-Case could be offset long-term by competitive gains in the marketplace. Retail success depends on brand loyalty. But with so many choices for consumers, an empty shelf due to supply chain volatility can devastate brand value in the mind of a disappointed shopper. Just-in-Case can help ensure that a product is consistently and reliably available, increasing trust in the minds of consumers.

Just-in-Case Inventory Management as a Solution

Supply chains may want to consider these three simple changes in mindset:

  • Think about probabilities. Develop an understanding and ranking of a range of probable scenarios and outcomes. 
  • Develop options. Devise several likely scenario-based plans, and evaluate each for likelihood, risks, and rewards. 
  • Build your ability to sense change early and respond. Decision-making should be based on data, prior experience, and scenario planning. Be aware when business intelligence indicates likely disruptive change and how that will impact your business goals while allowing plenty of time for your response.

The mindset change to Just-in-Case requires decision makers to develop their strategic skill set, actively watching for early signs of disruption, such as late supplier shipments or abrupt changes in demand. A Just-in Case approach, when paired with probability-based scenario planning, might result in more liberal inventory management and slightly higher costs.  However, as the potential next generation of inventory management strategy, it might very well win the day by securing competitive market share and business continuity.

Search
Latest Braking News

The Final Mile Delivery Market

Supply chain logistics involves the movement of goods from their origin or manufacturing point to the end-user, often requiring detailed planning, and specialized transportation and

Read More »
pace drivers

Solving Logistics Together

Solving Logistics Together is a Pace passion. As we celebrate our 25-year anniversary as a preferred Logistics Service Provider (LSP) and seasoned regional carrier, renewing

Read More »

Privacy Policy

PACE takes your privacy very seriously; in general, you can visit PACE websites without telling us who you are and without revealing any information about yourself. There are times, however, when we may need information from you.

PACE does not rent, sell, or share personal information about you with other people or nonaffiliated companies except to provide products or services you’ve requested, when we have your permission, or under the following circumstances:

  1. We provide the information to trusted partners who work on behalf of or with PACE under extremely strict confidentiality agreements. These companies may use your personal information to help PACE communicate with you about offers from PACE and our marketing partners. However, these companies do not have any independent right to share this information.
  2. We have a parent’s permission to share the information if the user is a child under age 13.
  3. We respond to subpoenas, court orders, or legal process, or to establish or exercise our legal rights or defend against legal claims.
  4. We believe it is necessary to share information in order to investigate, prevent, or take action regarding illegal activities, suspected fraud, situations involving potential threats to the physical safety of any person, or as otherwise required by law.
  5. We transfer information about you if PACE is acquired by or merged with another company.

You may choose to give us personal information, such as your name and address or e-mail id that may be needed, for example, to correspond with you, to download our white papers or to provide you with a subscription. If you tell us that you do not want us to use this information as a basis for further contact with you, we will respect your wishes. We intend to protect the quality and integrity of your personally identifiable information.

We will make a sincere effort to respond in a timely manner to your requests to correct inaccuracies in your personal information. To correct inaccuracies in your personal information please return the message containing the inaccuracies to the sender with details of the correction requested.

Terms of Use

The following terms and conditions will be deemed to have been accepted by the User on usage of the website pacedelivers. You are requested to read them carefully before you use the services of this site.

  1. The term User shall refer to the user who is browsing the site. The term PACE shall refer to PACE Inc. The term Site refers to http://www.pacedelivers.com owned and monitored by PACE.
  2. By using the Site, you agree to follow and be bound by the following terms and conditions concerning your use of the Site. PACE may revise the Terms of Use at any time without notice to you. Areas of the Site may have different terms of use posted. If there is a conflict between the Terms of Use and terms of use posted for a specific area of the Site, the latter shall have precedence with respect to your use of that area of the Site.
  3. PACE may terminate User’s access at any time for any reason. The provisions regarding to disclaimer of warranty, accuracy of information and indemnification shall survive such termination. PACE may monitor access to the Site.
  4. All content present on this site is the exclusive property of PACE. The software, text, images, graphics, video and audio used on this site belong to PACE. No material from this site may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from PACE. All rights not expressly granted herein are reserved. Unauthorized use of the materials appearing on this site may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. PACE is a registered trademark of PACE Inc. This trademark may not be used in any manner without prior written consent from PACE.
  5. PACE does not make any warranties, express or implied, including, without limitation, those of merchantability and fitness for a particular purpose, with respect to any information, data, statements or products made available on the Site.
  6. The Site, and all content, materials, information, software, products and services provided on the Site, are provided on an “as is” and “as available” basis. PACE expressly disclaims all warranties of any kind, whether express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
  7. PACE shall have no responsibility for any damage to User’s computer system or loss of data that results from the download of any content, materials, information from the Site.
  8. PACE may change or discontinue any aspect of its website at any time, including its content or features. PACE reserves the right to change the terms and conditions applicable to the use of the Site. Such changes shall be effective immediately upon notice, which shall be placed on the Site.
  9. In no event will PACE be liable for damages of any kind, including without limitation, direct, incidental or consequential damages (including, but not limited to, damages for lost profits, business interruption and loss of programs or information) arising out of the use of or inability to use PACE’ website, or any information provided on the website, or in the Products any claim attributable to errors, omissions or other inaccuracies in the Product or interpretations thereof. Some jurisdictions do not allow the limitation or exclusion of liability. Accordingly, some of the above limitations may not apply to the User.
  10. User agrees to indemnify, defend and hold PACE harmless from and against all losses, expenses, damages and costs, including reasonable attorneys’ fees, arising out of or relating to any misuse by the User of the content and services provided on the Site.
  11. The information contained in the Site has been obtained from sources believed to be reliable. PACE disclaims all warranties as to the accuracy, completeness or adequacy of such information.
  12. PACE makes no warranty that: (a) the Site will meet your requirements; (b) the Site will be available on an uninterrupted, timely, secure, or error-free basis; (c) the results that may be obtained from the use of the Site or any services offered through the Site will be accurate or reliable.
  13. The User’s right to privacy is of paramount importance to PACE. Any information provided by the User will not be shared with any third party. PACE reserves the right to use the information to provide the User a more personalized online experience.
  14. The Site provides links to web sites and access to content, products and services from third parties, including users, advertisers, affiliates and sponsors of the Site. You agree that PACE is not responsible for the availability of, and content provided on, third party web sites. The User is requested to peruse the policies posted by other web sites regarding privacy and other topics before use. PACE is not responsible for third party content accessible through the Site, including opinions, advice, statements and advertisements, and User shall bear all risks associated with the use of such content. PACE is not responsible for any loss or damage of any sort User may incur from dealing with any third party.

We got your message!

Thank you – we’ll be in touch soon.

Thanks for your interest!

We will keep your information on file and let you know if an opportunity becomes available in your area.