Today’s globalized markets have made one thing certain: Change can happen at any moment. The past years have been a prime illustration of this phenomenon as supply chains have dealt with new compliance requirements, increasing fuel costs, shipping tariffs, the e-commerce boom, and persistent labor shortages across multiple industries. Studies show that 7 in 10 employees do not feel fully prepared for the future of work since businesses are constantly navigating through numerous external and internal pressures.
Across the supply chain, around 58% of businesses have reported an increase in fulfillment volume. At the same time, 73% of employers report difficulty in attracting and retaining employees, creating fulfillment challenges for warehouses seeking to stay ahead of consumer expectations. In response to surprise demands and shortages, distribution centers must optimize inventory tracking systems to prevent sudden stockouts and/or overstocking. Consequently, many businesses have found themselves choosing between Just-in-Time (JIT) and Just-in-Case (JIC) inventory management. Both models provide advantages that keep operations prepared for sudden changes; however, they also enable possible pitfalls in the face of change. As warehouses continue to modernize technologies, it is crucial to understand handling options to find an automation solution that accommodates unique workflows.
While both systems have unique specifications, both aim at expanding inventory control by giving warehouses more flexibility with a smaller team.
Warehouses operating within a JIT model do not hold reserve stock. Instead, they order precise amounts of materials needed for orders, minimizing storage expenses, and ensuring flexibility. This method trims unnecessary operational costs, reallocating budgets to other more pressing matters. Furthermore, for businesses handling perishable items, JIT proves beneficial in preventing expired products from progressing through the supply chain and causing recalls.
On the other hand, JIT systems are vulnerable when sudden changes such as extreme weather, natural disasters, and shortages happen before replenishment. Businesses dealing with multiple manufacturers and distributors risk prolonged stockouts if they don’t hold reserve stock.
Unlike JIT, warehouses leveraging JIC inventory management will stock reserve products to proactively prepare for possible shortages and spikes in demand. By analyzing former purchase patterns, warehouses can accurately estimate needed stock before transactions are completed. This model augments flexibility as warehouses can operate with multiple manufacturers and distributors without worrying about sudden shortages since they have a reserve.
On the flip side, JIC handling can be more costly due to acquisition and storage expenses. Moreover, in the event demand dips unexpectedly, warehouses may find themselves with surplus stock at a depreciated value.
Although both methods can be highly beneficial for different scenarios, JIC management has gained much traction as distributors and retailers attempt to overcome shortages before they happen. However, without the right systems, poorly managed JIC inventory can result in:
Fortunately, modernized automation simplifies data capture to expand inventory visibility across the supply chain, giving teams greater control over replenishment and storage.
Technology leaders estimate that over 70% of warehouse decision-makers intend to empower teams with partial automation. Replacing error-prone manual tracking, automated computing expands inventory control by giving you real-time stock counts and location. This ultimately facilitates cross-docking and order picking since teams know where products are located. Before integrating a mobile computer, be sure to prioritize the following features in your solution:
Although mobile computers are foundational to an automation solution, they are not the only essential part required for dependable efficiency. As a matter of fact, many decision-makers still feel hesitant to deploy future-forward technologies despite their proven track record. In addition to reliable technology, modernizing supply chains must also integrate the following support strategies to ensure continuous efficiency:
Though it may be hard to predict the state of modern supply chains within the next five years, one fact is sure: changes are likely to keep reshaping consumer expectations and mainstream workflows. Although JIT and JIC currently dominate most inventory management practices, novel technologies such as artificial intelligence and digital twins may yet play a role in revolutionizing the modern warehouse. To proactively stay ahead of change, specialists recommend partnering with solution developers to preserve agile scalability within your systems. For more information on today’s leading supply chain challenges, contact us here.