While some businesses may find it beneficial to get ahead in some regards, others are finding it cost effective and more productive to have some of their processes employ "just-in-time" strategies. This style of manufacturing and shipping has been growing more popular in recent years, and it's proving it can provide business cost reductions, smoother operations and better risk management strategies to those who test it.
Big potential for businesses
Planning these just-in-time strategies can help a company avoid problems with overspending on manufacturing, storing or transporting products down the line, while still ensuring its products are consistently on store shelves or in transit.
Companies can implement these techniques to ensure they can save funds during the manufacturing process. This not only allows companies to save on production, should a product not sell well, it also lets them to keep smaller amounts of inventory on-hand, reducing the need for large storage warehouses and cutting inventory expenses. Just-in-time policies can also benefit businesses by giving them the opportunity to save on logistical costs. Goods are shipped on an as-needed basis, which can cut down on the amount of freight a firm needs to transport on a regular basis.
Just-in-time policies do have a drawback for some companies. In the event of natural disasters or unexpected events, a business may not be able to ship more product to a certain area or continue its prior manufacturing levels - potentially resulting in a merchandise shortage. However, according to The New York Times, some firms are mitigating this risk by adding additional distribution centers and diversifying their logistical processes to ensure smaller on-site inventories won't be put at risk by disruptions that can't be prevented or worked around.