Just In Time or Just To Late?

Filed in archive Point of view on October 4, 2005

It's more than 15 years that different comapnies all around the world have been using JIT tools and techniques. The underlying reason to start these initiatives was the thought that JIT helps businesses to decrease the lead-time and inventory and so reducing costs.

That sounded like a pretty good idea on its time but how about today? Is it still an effective and useful concept?

Vancouver Port Authority president and CEO, Capt Gordon houston doesn't think so.
"JIT was a great concept, where the actual transport chain became the warehouse. Importers did not care what routing or transport mode the box used, as long as it arrived on time," Houston said. "But importers have realised that constant delivery is better than JIT."

"Any disruption to the supply chain can have a significant impact on a business, and can be catastrophic to a tight production line. Expediting shipments to cover for a broken link in the supply chain sends costs back up, making the whole procedure an exercise in futility," He mentioned based on a result of a study that they had done on the subject.

To get around this, shippers are creating buffers, not just by holding inventory, but also by sourcing from different countries to avoid delivery disruptions, such as having containers of garments held up because Europe importers exceeded China quotas.

(Source of the original news: CargoNews Asia)