First it was toilet roll. Then bread flour. Now fuel. There’s been countless shortages over the last 18 months due to manufacturing and supply chain issues. Whilst consumers adopted a ‘just in case’ mentality, buying 50 bags of pasta for a three-month lockdown, not all manufacturers went for such an approach.
Why? Because there’s a good argument for embracing a ‘just in time’ mindset instead. Here, we weigh up the pros and cons of both…
Just in time
This is a key concept in lean manufacturing, focused on operating to actual consumption and low inventories. With ‘just in time’, you ensure your materials are delivered a couple of moments before you actually need them. You’re not running late, but more ‘by the skin of your teeth’, so to speak.
It removes inefficiencies, and steps that don’t add any value in the process. Plus, it’s proven to be more effective, as businesses have improved at forecasting demand and optimising their operations.
Given the stockpiling trend that’s gained momentum since 2020, it’s easy to see why a ‘just in case’ mentality is the preferred option, but we’d argue against this. Although ‘just in time’ may seem like a risky strategy, this way you don’t hold any stock. There’s no transportation or storage waste, and you’re not overprocessing and compromising on labour and time. It’s even the method we teach on our lean courses.
Just in case
‘Just in case’ is the more traditional model. This method is all about risk management, working to minimise the chance of low stock, and ensuring orders are fulfilled ahead of time. It considers anticipated usage and has high inventories, but despite being the more natural approach, it isn’t necessarily the most effective.
See, the ‘just in case’ method can actually cause all systems to collapse, resulting in inefficiencies across the board. It creates waste, can trigger storage issues, and doesn’t lead to what customers need or expect.
At the end of the day, customers never envisaged businesses to have a significant amount of backup fuel, hand sanitizer, or paracetamol. Many manufacturers shifted their models to account for consumer stockpiling, and now, most of the items that couldn’t be found in March 2020 are piled high on the shelves. So, the ‘just in case’ mentality results in excess stock, which isn’t ideal given the limits on warehouse space.
Our recommended approach
The stockpiling situation may give ground to ‘just in case’, allowing businesses to keep up with demand. But it also means capital is tied up in inventory and considerable storage costs. That’s why we recommend a ‘just in time’ approach, as it leads to less waste, lower fees, and increased efficiency – even if it doesn’t seem like the natural strategy.
If you find yourself reverting back to a ‘just in case’ mindset, you might need to alter the way you think. The Manufacturing Institute can help. We have a number of in-person and online lean courses available. The skills and knowledge gained turns managers into effective lean leaders, enabling them to create real change and boost their business’ bottom line. To find out more, contact our team today.
Which mindset do you think is better, ‘just in case’ or ‘just in time’? Let us know your thoughts by commenting on our LinkedIn post about the topic.More News