Throughout the supply chain industry there are various types of inventory management processes that businesses use depending on how they operate. Some examples of inventory management trends include the min/max method, omni-channel fulfillment, just-in-time, and just-in-case methods. Perhaps one of the more popular practices, the just-in-time method, involves a business setting up its supply chain so that products arrive from a supplier only as they are needed, reducing the need to store excess products in the warehouse. The goal of this method is to have no more products stored, and no fewer, than a retailer needs at that moment.
Benefits of a Just-in-time Supply Chain
A just-in-time supply chain can improve an enterprise’s processes and make them more efficient and cost-effective. It accomplishes this through several key benefits:
- Prevents overproduction
- Cuts costs by streamlining production
- Can improve product quality
- Reduces inventory management costs
The successful implementation of a just-in-time supply chain method at the right time can benefit a business and its consumers.
However, the pandemic exposed vulnerabilities in the supply chain that many companies never could have anticipated. The just-in-time approach can typically work well when a steady and consistent volume of products is ordered. As manufacturing progresses, raw materials arrive “just in time” to complete production, without the need for a large backlog of materials that may be expensive to store. But when there is a sudden and unexpected surge in demand — such as the demand for paper goods and cleaning products that took place during the onset of the pandemic — the limitations of this approach quickly become apparent.
The Just-in-case Supply Chain
To manage supply chain disruptions, some distribution companies are making the switch from a just-in-time supply chain method to a just-in-case method. Unlike the just-in-time model, the just-in-case supply chain method involves businesses storing more product than they need to cover anticipated demand. This reduces the risk of running out of stock if consumer demand suddenly rises.
Another way companies can protect their supply chains from future disruptions is by partnering with a plastic pallet pooler to efficiently manage the shipping pallet fleet. With a pooling company like iGPS you will always have the number of pallets needed to ship your goods because they can scale up and down as needed. iGPS plastic pallets also incorporate smart features that make them traceable throughout a supply chain. These features allow companies to capture data at any point of distribution, ensuring better planning and efficiency, and helping to lower a company’s Total Cost of Business (TCOB).
Although many have evolved to a just-in-case inventory method, it is not anticipated that the just-in-time supply chain is gone for good. As companies continue to adapt and evolve in the changing environment, the just-in-time method can still be beneficial as disruptions settle.
Companies committed to incorporating a just-in-time or just-in-case supply chain method use iGPS plastic pallets for all their shipping needs. Our lightweight, recyclable plastic pallets incorporate RFID technology making them traceable throughout a supply chain. For more information, contact us at 1-866-557-0047, email a specialist at [email protected], or visit our contact page.