![]() ![]() Fast, low-cost international shipping meant fewer consequences for getting it wrong - if a business underestimates how many parts or supplies it needs, it’s relatively trivial to order more.Just in time became prevalent because of three main factors: In contrast to the "always have inventory on hand" ethos of just-in-case, just-in-time inventory management strategies are about holding as little stock as possible. What does JIT involve, and why has it gained popularity versus JIC? Just in Case (JIC) vs. JIC lost relevance as manufacturers flocked to a leaner, just-in-time (JIT) methodology. Now, manufacturers and marketers have techniques to survey the market, and supply chains have become more resilient. That changed as logistics as a discipline matured and companies got better at inventory forecasting. ![]() It made sense to offset the risk of unexpected demand spikes or a supplier going out of business. Shipping was expensive, lead times were long and items may or may not arrive intact. Before beginning a production run, manufacturers ordered more supplies than they needed, and they produced more product than they expected to sell - it was simply the only inventory strategy they'd ever used. Pre-1960s, no one called this a "just-in-case" model. What Is Just in Case (JIC)?Ī just-in-case (JIC) inventory management strategy prioritizes having safety stock on hand to reduce the risk of supply chain disruptions or spikes in either the price of a raw material or customer demand for a product. ![]() And, we’ll explain how to balance JIC and JIT to preserve the latter's agility without sacrificing the former's pragmatism. We’ll compare which advantages accrue to JIC versus JIT and whether disadvantages outweigh the benefits for some companies. In this article, companies can learn how even a modest move toward just-in-case inventory management can help them hedge against risks to the supply chain. Not all businesses can take full advantage of a just-in-case inventory model, but this strategy is far from obsolete. And if raw materials prices rise precipitously or an act of nature throws a temporary wrench in a supply chain, companies have the stock on hand to wait out the storm, whether literal or figurative. If customer demand spikes unpredictably, businesses have enough products to make those sales. If a supplier goes out of business or can't fulfill orders at the volume required, the company won't run out of supplies. Just-in-case has several advantages in the present, however. JIC takes up more space and entails several risks, including that excess inventory becomes obsolete before it can be used or sold. Inventory managers have decried the just-in-case inventory system as generating higher costs compared with JIT. But as we've recently seen, an over-reliance on JIT leaves manufacturers and retailers vulnerable to supply chain shocks.ĭoes just-in-case (JIC) inventory management, where companies keep a buffer supply of products, parts and materials, deserve a resurgence? Relatively tight stocking of parts and raw materials does yield advantages, such as lower costs, less waste and easier change orders. Since the introduction of just-in-time (JIT) methods in the 1960s, manufacturers have become obsessed with keeping inventory levels low. East, Nordics and Other Regions (opens in new tab) ![]()
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