The focus on lean techniques has led to a demand based system for purchasing inventory. The goal is to keep your inventory levels at the lowest level possible and still meet customer demands. However, the fragility of the global supply system, how inventory is purchased, stored, and pulled has changed, begging the question - what is JIT+ as opposed to JIC (Just In Case).
EPISODE 101: Summary
Let's start at the beginning. JIT (Just In Time) is part of the lean manufacturing concept of making something only after a customer has purchased it. That requires having inventory available (at your location or in transit for quick delivery) something close to immediately. This meant if the supply chains operated efficiently, where the materials you need were sourced didn't matter. However, the latest disruptions of the supply-chain have called this assumption into question.
Before lean, a business would purchase inventory based on historical records and stockpile it. You had the piece of mind that when the order came in you could respond immediately but what happens when your forecast is wrong? And if you buy too much - that is cash collecting dust. We have traded security for speed and a better bottom line.
EPISODE 102: Risk vs. Resilience
If you change the formula from speed and a bottom line to Risk vs. Resilience, the answer will change. Resilience means larger inventories, more employees (handling inventory), multiple suppliers, and higher costs. However, becoming resilient has its own risks - a loss of competitiveness. The following are some ways to become more resilient with lower risks.
EPISODE 103: What If You Sell Time?
Here we have a very different problem I haven't seen addressed. What if you are pure services business or sell electronic products with services attached? How do I inventory time?
Well that has a simple answer - you can't. Imagine approaching a customer with the following sales proposition: "I'll sell all of last week for 50% off?" They will think you are crazy because time is a perishable. Once it passes it is lost.
The following are some ideas of how you can pull inventory in advance so there is nothing lost.
EPISODE 104: Interview with John Richards
Next Show/Chapter 25: Accounts Payable
How to apply today's show to your business:
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