From manufacturing to fashion and food, the trends are showing that customers expect more control over what they purchase, how they purchase it, and when they receive it. So what does this mean for the container industry? In short, it means that the container industry must move - as a whole - to more efficient practices.
Just In Case vs Just In Time Shipping
Traditionally, the container shipping industry has been largely run to a Just In Case (JIC) model. This model requires large amounts of stock to be shipped and stored in advance of customer orders. “The logic in JIC shipping is to avoid a stock shortage by overstocking on what inventory managers predict is needed. There’s a lot of guesswork involved.” Says Christian Vann a business writer at Academized and Boomessays.
Though some businesses prefer to bulk buy, the problem with the JIC way of working is that there are expensive associated costs such as storage, insurance, and stock management. Then there is the looming risk of stock going out of date or out of fashion before it can be sold to the consumer.
Just In Time (JIT) shipping does away with many of the associated costs of the JIC model. There is no upfront inventory cost for bulk shipping for a start. Also, because JIT shipping works on the model of the customer purchasing a product before that product is sent through the supply chain or only preparing orders to restock popular items as the on-shelf inventory begins to run out, warehouse storage, and also insurance costs are much reduced.
The downside to the JIT way is that there is little room for error or flexibility in such a lean system. If something happens to part of the supply chain that prevents it from fulfilling its role, then there is a direct knock-on effect for the consumer.
Implementing A Just In Time Shipping System
JIT is far from being a new fad. Huge names like McDonald’s, Dell, Walmart, Toyota, and Apple have been using this lean approach for a while. Successful Just In Time shipping is dependent on good planning and good data. Moving to a leaner supply chain model is by no means easy but can save businesses and industries a fortune.
“The move to a JIT inventory system starts with planning and may require businesses to assess how they are organized. Efficiency is the aim of JIT so any part of the business that is not efficient will require an upgrade to prevent problems. There is an opportunity in this for businesses to become more efficient as a whole and not just in their supply chain,” states Roger Ginsberg a tech writer at Writing Populist and Simple Grad.
Communication with suppliers is key for implementing and running a JIT system. After all, without them, there is no sellable stock. You could have your inhouse team sit down and design the ideal JIT system for your business. However, this will most likely lead to unrealistic lead-time expectations amongst other issues. Including the supplier in the conversation from the start allows realistic system planning and also has the benefit of benefiting from the experience of the supplier.
Data Use For Just In Time
Technology plays a huge role in nearly every part of everyday life. It is no surprise then to learn that it plays a major role in running efficient JIT systems. Supply Chain Analysts are the bee’s knees of the modern shipping world.
Using live data from stores, supply chain stages, and online ordering, Supply Chain Analysts not only help the whole JIT system run smoothly but they can also help predict anomalies. These types of insights could be the solution to the inflexibility of the JIT inventory approach. By understanding that there are occurrences when consumer behaviour is predictable through data businesses have the opportunity to run temporary parallel shipping systems to meet spikes in demand (think holidays, new year, etc).
Without the use of data in inventory management, it is still just guesswork. There isn’t one part of a supply chain that can not be improved with data analysis.
Katherine Rundell is a business editor at Assignment help services and Best assignment writing services AU. She assists companies with their supply chain strategies and contributes to numerous sites and publications. Also, she is a writer at Best Essay Services.
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