Gary Whittle, Commercial Director at Meachers Global Logistics, gives his insight into the Just-in-Time vs Just-in-Case debate for effective inventory management.
He explores the reasons why businesses are moving away from Just-in-Time, explains the key differences between both inventory control models, and describes how Meachers’ consultative approach is helping its customers to better understand which approach is right for them.
Why are we seeing businesses move to a Just-in-Case inventory model?
Over the past few years, our industry has experienced significant volatility in shipping, inventory control, and supply chain disruptions. It’s crucial to assess how these challenges have impacted our clients’ operations.
Historically, we’ve primarily managed Just-in-Time requirements from our clients, focusing on fast turnarounds and specific timeframes. However, we are now witnessing changes in these demands.
Alongside fluctuating timeframes, we’re encountering volatility in costs, with clients and suppliers alike providing rates on short notice. As a result, we’re enhancing our adaptability and scalability as service providers.
What are the key differences, and advantages, of Just-in-Time and Just-in-Case?
For Just-in-Time strategies the advantages are clear: reduced inventory levels translate into lower warehousing costs and minimized shelf stock.
However, this may limit flexibility in responding to fluctuating sales demands. Just-in-time operations are best at reacting to precise forecasting and purchasing plans. Comparatively, a Just-in-Case approach increases storage and warehousing costs due to higher inventory levels.
However, it enables a broader range of stock-keeping units (SKUs) and quicker response times to customer needs, particularly in manufacturing scenarios where shortened lead times are critical. Moreover, consolidating freight purchases can reduce unit delivery costs.
The key takeaway is that one size does not fit all — Just-in-Time isn’t the sole solution in today’s market; the Just-in-Case method warrants consideration.
By consulting closely with our clients, we align our supply chain processes with their specific requirements.
How can a Just-in-Case strategy help to mitigate supply chain volatility?
Bulk purchasing extends lead times, offering flexibility to adjust to market volatility. Delays, such as ships arriving late, pose minimal disruption when planning for needs several weeks ahead, unlike the immediate impact of Just-in-Time approaches.
It does vary by customer and even by product type. For instance, generic products with high stock levels maintain continuity regardless of lead times. Despite increased costs, critical items benefit from earlier procurement to minimise end-point disruptions.
What challenges should companies anticipate when transitioning to Just-in-Case?
Forecasting becomes paramount — accurately predicting demand, seasonality, and market shifts is crucial. Given recent disruptions, this has become increasingly challenging.
By implementing a Just-in-Case strategy, businesses can mitigate risks associated with supply chain interruptions, potentially gaining an edge over competitors relying solely on Just-in-Time methods.
How do Meachers help businesses to tackle these challenges?
Communication is key. While we offer expertise in warehousing and supply chain optimisation, understanding our clients’ market dynamics and sales forecasts is vital.
Disruptions are inevitable in our industry, requiring proactive communication. By collaborating closely, we tailor solutions to their specific needs, whether recommending Just-in-Time or Just-in-Case strategies.
Through market research and dialogue with our partners, we identify efficient solutions that balance cost-effectiveness with operational efficiency. Our goal is to mitigate risks and enhance reliability in client supply chains.
Get in touch to discuss your warehousing requirements
For those interested in exploring Just-in-Case or Just-in-Time solutions with us, our team welcomes enquiries.
Our consultation is entirely no obligation — we’re here to discuss potential solutions tailored to your needs.
Reach out to us at [email protected] or for more information, visit: https://meachersglobal.com/services/uk-warehousing/
