JIT and E Commerce

Hello. In this week’s blog I am going to share some information and suggestions regarding a topic most of you are familiar with. It’s JIT. Motto of this blog is to help supply chain managers improve their workflow.

Supply chain management is a difficult task indeed. Many companies follow different tools and methods to successfully maintain the Supply Chain.

Not all succeed!

Any idol Supply Chain Manager should possess few expertise like

  • Strong estimation of demand/requirement of inventory/ components.
  • Decision making abilities.
  • Strong negotiating power.
  • Expecting the unexpected

We all know what is JIT.

Just In Time.

As its name suggests; it means that the inventory or components needed to manufacture any product, is ordered whenever required only. In JIT, the quantity of inventory is also ordered as per the requirement.

Here the risk of excess inventory gets avoided.

The estimation of stock and component requirement need to be very accurate and efficient to implement JIT.

If the estimation goes wrong, then two things might happen:

The requirement of component estimated sometimes goes wrong. If it is less than required, manufacturing process stops completely. If the estimation shows greater number than required, no use of JIT! The motto of JIT is to avoid excess inventory and problems associated with it.

 

Advantages of JIT

  • No warehousing needed
  • No space engaged for stock
  • Less money
  • Less time

One biggest risk JIT has is ‘high dependence on suppliers’. If any supplier fails in delivering the components needed in desired time, then the manufacturing stops completely. Now e commerce has reduced this risk of manufacturers completely. In this internet savvy environment, no manufacturer will completely depend on traditional vendors to supply components. If the regular supplier fails, then the manufacturer can search for online component marketplaces such as Digikey, Octopart, iodParts, etc. These are the online electronic component marketplaces where you get components as per your need. The plus point is manufacturer do not have to wait for long time as the delivery and transactions are immediate. Using e commerce as a tool to buy components online reduces many efforts, cost, time, etc. By applying this new way of procuring components, manufacturing companies can successfully implement Just In Time Technique.