The JIT Concept
JIT is a Japanese management philosophy that was put into use in Japanese automotive manufacturing facilities in the 1970s. Originally development by Toyota as a way to meet consumer demand with minimal delays, JIT is now applied to a broader philosophy focused on operating with minimal waste.
Whether you’re looking at ways to streamline shipping overhead or minimize warehoused inventory it’s important that your approach to shipping is a good fit for the needs of your company and your customers.
- Less is more: Rather than waiting for a full truckload, consider shipping individual pallets of goods. This can help your customers with limited warehouse space better manage their inventory. This can also free up space in your own warehouse through more frequent, smaller deliveries. With pallet pick-up and delivery available in as little as one day within the UK and two days in the EU, it is easier to deliver shipments exactly when and where they’re needed.
- More is less: If your company has been spending time tracking the delivery of individual boxes, it could be time to consider consolidating those boxes onto a single pallet for delivery. Your shipping staff will have fewer items to track and there will be fewer shipping invoices which will simplify accounting processes. This can save you time and money. Single pallet shipments might also be easier for your customers’ receiving departments.
- If JIT shipping means going to the use of more individual shipments of boxes, JIT might not be the right fit for your company. In addition to being harder to track, smaller boxes require more packing materials and handling. These are important costs to consider when evaluating shipping options.
The concept sounds great, but is it the right fit for your company? These are the questions you should ask.
- How variable is demand? If it is difficult to predict how many of a particular item will be needed, you might want to consider switching to a JIT approach. This could reduce the amount of warehouse space required and free up financial resources that would otherwise be tied up in inventory.
- Are customization and other product variables likely to change? If your industry is prone to changes in the colors, features, or other attributes of the items you produce, it’s important to try to develop a JIT manufacturing strategy.
- How can you best streamline your manufacturing? If your workers can easily switch from producing one product to another, it can be easy to minimize inventory with JIT manufacturing. However, for most companies there are notable costs each time you switch from producing one product to another. The costs could include the labour to retool the line to produce a different item, raw materials that are cleaned out, and therefore wasted, each time you switch products, and paying for employee downtime while these changes are being made. It is important to also consider if employee errors increase as workers get back up to speed producing a new item.
- How would JIT impact your workforce? If product demand varies seasonally, a JIT approach would create a need for more employees during the busy production season. This can make it difficult to staff up to handle the seasonal workload and created additional work and cost associate with your Human Resources management. Maintaining a more consistent production schedule could make it easier to attract and retain good workers and keep stable workforce throughout the year. This could be particularly important if highly skilled workers are needed or if mistakes by less experienced workers could have a significant financial impact. Plus, although not all companies take this into consideration, many businesses want to provide a good work environment for their employees. This could mean devising manufacturing strategies that consider employee retention as another long-term cost savings.
- How would JIT manufacturing impact your purchase of raw materials? If you’re considering switching to JIT production, will you pay more for raw materials than you would if you were ordering the same volume of materials each month? Will consolidating deliveries reduce costs from your supplier only to cost you more in warehouse storage space? Is it easier and safer to store the manufactured materials or the raw materials? Can you take advantage of seasonal discounts on raw materials reduce costs?
Before making any significant change to your company’s processes, it’s important to look at both the risks and the benefits. One conservative approach is to first look at possible savings from changes that aren’t likely to significantly impact your workforce. For example, you could try modifying shipping methods for individual orders or suppliers as a small-scale experiment, rather than committing to making changes to all of your orders at once.