What does JIT mean?
Just-in-Time (JIT) is an organisational strategy in production and logistics. As the name implies, it means that material for production is delivered at the very moment and in the exact amount it is needed. In logistics, Just-in-Time means that a shipment arrives at the moment the recipient needs it. JIT has the goal to make the value creation process leaner and less costly because warehousing is obsolete and capital commitment is kept at a minimum.
Just-in-Time – Pros and Cons
The JIT-strategy brings many advantages, but has its share of disadvantages as well. With Just-in-Time the whole flow of material along the supply chain must be exactly synchronized.
- no stock keeping necessary, saving space and costs
- no capital commitment
- fast reaction to changing markets is possible
- high amount of control necessary
- high default risk
- big delivery zones needed
When it comes to a default risk, our airmates can help. When, for example, a production machine is breaking down, a spare part is desperately needed to keep the Just-in-Time production going and avoid defaulting on delivery contract. An On Board Courier will deliver the spare part securely and as fast as possible to the place it is needed.
Requirements for JIT
The production principle Just-in-Time is not suited for every type of business, certain requirements must be met for it:
- good infrastructure
- optimized information flow
- optimized organisation
- short set-up times
- adequate delivery zones
- flexibility on the side of the supplier
- specific composition of the contracts
- high amount of orders