Just in Time processes

Are you ‘Just in Time’ to retool your supply chain?

In Blog by Patrick Shore

This whole pandemic is really – pardon the pun – staining our collective impression of toilet paper. After all, if there’s one item truly emblematic of the whole crisis, it’s that.

Not to minimize the human impact of the virus, of course, but as we take a step back and look at the broader global picture, we start to see some of the weak links in our processes, with regards to our goods and services.

This is especially true of the supply chain and “just in time” (JIT) processes, a hallmark of the manufacturing industry for years. JIT is used widely by small-to-mid-sized enterprises and has increased greatly with the rise of e-commerce over the last decade.

But just like those three women wrestling over the last package of Charmin, we’re witnessing what happens when the system is stressed. So, as you reassess your business during this time of upheaval, is it time to rethink JIT and adjust your processes for a better mix moving forward?

JIT vs. JIC

For so many SMBs, margins are often razor thin, increasing the need for efficiencies wherever they can find them. JIT processes allows each company and manufacturer to only produce what has been ordered (and paid for) by the next link in the supply chain.

This is great for reducing the cost (and risk) of holding a large inventory of stock—items that may or may not be sold and that may diminish in value over time. And with less inventory, your overhead and labor costs usually go down as well, which means a more efficient supply chain.

Contrast JIT with JIC, or “just in case” processes, characterized by large inventories of items to ensure the company can always meet demand. Think Amazon, which (in normal times) can get you that 24-pack of Angel Soft Mega Rolls usually in a day. JIC contributes to that reputation of reliability—yet often skews consumers’ expectations of how fast we think we should be able to receive, well, anything we order.

The weaknesses of JIT

As we’re all hit from the pandemic ripple effect, we’re beginning to see the possible shortfalls of JIT in many critical business operations. With much of China’s production shut down and U.S. manufacturing stalled, maybe a continuous flow of parts and products is more important to stay in business?

Nowhere is this most evident is in our nation’s hospitals. Already operating with the thinnest of margins, the crisis has exposed the weakness of JIT in very real terms. Richard Bartlett, emergency preparedness coordinator for the Kentucky Hospital Association, told TPM about the challenges of finding replacement protective equipment options for staff:

“Some raw materials used to make these items are primarily made in China or other countries … Domestic manufacturers may also need to find new sources … They are nervous about the future. So, projecting their needs forward given the new paradigm is prudent.”

Of course, JIT worked for a reason, and not every baby should be thrown out with this pandemic bathwater. The important step is to take this time to evaluate what works best for your business—and stay open to change. Jaume Ribera, professor of operations management at IESE Business School, elaborates in Forbes:

“Some have questioned whether this crisis marks the end of just-in-time, lean manufacturing, and whether it marks an inevitable swing toward de-globalization. I think not … There were sound economic reasons for the globalization we’ve experienced over the past 20 years. Moving everything back home isn’t necessarily the answer … That said, some diversification might make sense to stagger production in different parts of the world.”

Whatever you decide, every business leader must now take a step back and rethink their overall business processes to be sure they’re not caught off guard. COVID-19 has shined a light on the need to rethink and redesign our processes—including customer assistance, customer service, fulfillment, invoicing and supply chain management.

Partner up for better processes

Retooling business processes can be a daunting task, however, so consider working with a partner to provide an outside perspective—a partner who can serve as a true complement to your staff, to increase your team and process efficiency to give you a competitive advantage.

The Business Process Optimization team at Veracity can work with you to provide innovation in your business processes and capabilities to solve both immediate and long-term challenges. In addition, the team brings a unique perspective though the Innovation Hub to facilitate new ideas and ways to reimagine how your business processes become that competitive weapon you always wanted.

That way, you can get back to moving your business forward, and toilet paper can just be toilet paper once again.

Patrick Shore is vice president of innovation at Veracity Consulting, a tech consulting team who deliver customized IT solutions for commercial and government clients across the U.S. Learn more at VeracityIT.com, and share your thoughts on Facebook or Twitter @engageveracity.