![]() In fact, storing inventory can make up as much as half of a company’s capital investment. JIT also reduces the risk of storing defective and obsolete stock - a crucial consideration when consumer demand can change overnight. When you only order what you need when you need it, you don’t run the risk of excess inventory, which runs up costs for businesses running on tight margins. The clear advantage of JIT is that it helps minimize waste, stockpiles, and all the associated costs of keeping inventory. Yet with all these extra demands, why are so many e-commerce retailers still striving to go leaner in their supply chains? How did Just-In-Time become so popular? Market insight: What do customers want, and how might that change based on new events or tastes?Īs you can see, you need to have the ability to predict your demand very well to have a chance at successfully running a lean model for fulfillment. These includeĪccurate inventory tracking: Inventory management software lets you see where your product is in real-time.ĭemand forecasting: Use software to analyze your historical data and predict what demand will be in the future. In order to get JIT right, e-commerce retailers need a few things. ![]() But this efficiency comes with one major caveat: you have very little wiggle room.įor an e-commerce company, a lack of wiggle room can get uncomfortable quickly. Just-in-case (JIC) is based on keeping extra inventory on hand just in case something goes awry, whereas just-in-time (JIT) means that firms only order and receive inventory as needed.Ĭhampioning efficiency seems like an obvious choice to make money and cut down on waste. You may see just-in-time compared to another style of inventory management, ‘just-in-case.’ Industries from auto to tech manufacturing have been using the method - which was originally popularized at Toyota in the 1970s - to lower costs and cut down on waste. The origins of Just-In-TimeĪlthough it’s currently in fashion for e-commerce brands, the just-in-time model has existed for decades. So how did this model become commonplace in supply chains, and how is the pandemic changing the scene?įirst, let’s take a look at what the just-in-time model is and its origins. With the potential for savings and efficiency comes serious risks - and that’s the name of the game where JIT is concerned. Read About CBIP's Adaptable Ecommerce Logistics Solutions ![]() If a supplier in China shut down over a new Covid case, your entire method of keeping goods flowing came to a halt overnight. Global supply chains saw continued shocks from all directions, and companies of all sizes - especially those using lean inventory management - were faced with uncertainty. Decreased costs and higher warehouse efficiency sped up JIT’s adoption, and soon enough brands around the world implemented it. In recent years, it’s become a popular method of inventory management - and for good reason. You might have heard this method referred to as “just-in-time” (JIT) or “lean.” So when it comes to storing inventory, the most efficient thing to do is to keep only what you need on hand, ordering new things as the need arises. As more and more brands emerge in the age of DtC e-commerce, the competition keeps getting stiffer. ![]()
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