From Lean to Just-In-Case to Just-In-Time Supply Chain Operations. What works for your business?
For years businesses have been working on creating lean operations, supply chain and other functions, all focussed on creating incredible supply chain and operational advantages, while delivering substantial costs-savings. Unfortunately, the latest pandemic and other macro-economic impacts, have changed this "lean" business model, as numerous supply chain and operational managers have realised that it's important to have continuous supply chains to enable continuous delivery to their customers, instead of lean supply chains, that are merely focussed on running supply chain at the lowest costs.
This shift in supply chain has created a new supply chain model that focusses on "Just-In-Case" operational and supply chains, which is a strategy used in supply chain management that involves holding extra inventory and/ or materials as a precautionary measure in case of unexpected demand or supply chain disruptions.
The JIC model is based on the idea that it is better to have too much inventory on hand than not enough, in order to ensure that customer demand can be met even if unexpected events occur. This approach can be particularly useful in industries, like health & wellness, medical sector, etc., where demand is difficult to predict or where supply chain disruptions are common, such as during natural disasters or unexpected events like the COVID-19 pandemic.
However, we have seen some drawbacks of JIC, as it often increases storage costs and the risk of inventory obsolescence. It can also lead to inefficient use of resources as excess inventory can tie up capital that could be invested in other areas of the business. As such, we have seen that many businesses are moving beyond Lean and JIC towards a more Agile and Flexible approach, such as a Just-In-Time (JIT) model, which focuses on minimising inventory levels and maximising responsiveness to changes in demand.
By working closely with a number of SME's, we have been able to introduce these pragmatic, agile and flexible supply chain models that meets their current and future operational and supply chain challenges, while continuing to also introduce sustainable supply chains.
This is how we continue to be the choice for many businesses to innovate their supply chains to meet the continuously evolving world....