Just-In-Time Logistics: What is it?
Just-In-Time Logistics: What is it?
Just-In-Time (JIT) logistics is the practice of ordering supplies when you need them. It is the complete opposite of Just-In-Case (JIC) logistics. JIC is – you probably guessed it – when you order excess supplies “in case” of any unforeseen changes.
JIT was introduced in the 1970s as a Japanese philosophy, advocating for continuous improvement. Made popular by the Toyota production system, it is now a standard in the supply chain system. Its global adoption worldwide has changed the way the business world operates.
Supply chain management constantly changes to help meet customer demand. With the introduction of JIT, it reimagined the supply chain industry. By focusing on manufacturing needs, it sought to fulfill inventory, yet reduce costs for businesses.
One of the most commonly cited advantages of just in time delivery is the prevention of stock build-up. Some companies prefer to pay for raw materials once the current stock is used. It also aids companies in accurately forecasting demand overtime.
Second, it gives businesses more inventory control. Lead time is reduced, making the cost of capital less expensive. Working employees can spend less time rearranging inventory when orders come in. Efforts can be redirected toward other manufacturing activities.
The reduction of monetary storage costs is another common reason why businesses love JIT. Renting inventory space and paying insurance for items can become extremely expensive. Many businesses prioritize reducing inventory costs and opt for its budget-friendly design. By switching from JIC to JIT, inventory costs can reduce significantly.
Other reasons for choosing the logistical model include more flexibility. Especially on holidays such as Halloween, Valentine’s Day, or Christmas, the model works best on high-traffic days. As a just-in-time model, it is more flexible to last-minute orders. Thus, it is easier for businesses to request a delivery of materials in a matter of hours versus weeks.
Popularity of JIT & the Gig Economy
JIT logistics still remains an extremely popular choice among businesses. JIT delivery has also been becoming more popular, as consumer demands have increased more than ever before.
Yet, this observation comes with a caveat. Because of the increase in consumer demand and expensive costs of operation, efficiency is harder to maintain. Businesses struggle with whether or not hiring in-house capital will help or hurt their business.
Luckily, the gig economy has been instrumental in the technological advancement of JIT. Logistic services are more in need of crowdsourced delivery options to reach order fulfillment. Since JIT follows a crowdsourced model, many companies hire third-party logistics who specialize in crowdsourcing. In this way, they avoid overhead costs, yet maintain quality control of operations.
GoShare JIT Services:
GoShare is a global JIT delivery service providing logistics support across most major US metros. We supply crowdsourced drivers for regional logistics, including middle-mile and last-mile delivery. From single pallet drop-offs to large box truckloads, we provide custom services to each of our clients.
To learn more about our crowdsourced services or becoming a potential partner, please click here.
To learn more about why our success rate is so high and why customers love our local delivery services, click here.
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