Just-in-time Delivery Explained: What is it & How Does it Work?

Due to industrialization, there is a high supply of products from the manufacturers’ side. But the demand varies with time. Sometimes the demand is so high that the suppliers can hardly keep the products in the warehouse. Whereas sometimes, the demand is comparatively less, and the suppliers need to store the products in the warehouse for a longer time.

Due to the uncertain demand-supply ratio, many industries are facing storage issues, and they are going out of space to store the products. Full storages require various resources like electricity and labor, which increases the business’s overhead cost.

To overcome this problem, Taiichi Ohno adopted the idea of just-in-time (JIT) at Toyota. Later, the US started adapting it in the late 1980s. In this blog, you will get in-depth knowledge of what is just-in-time delivery and how it can be helpful in your business.

Understanding Just-in-time Delivery

Definition of Just-in-Time Delivery

Just-in-time delivery means the process of creating goods in a ready state or completing their production so that a minimal inventory can satisfy demand and delivery can take place with immediate effect in order that consumers receive what they want precisely when they want.

Just-in-time (JIT) delivery is an inventory and supply chain management strategy aiming to minimize inventory and increase efficiency. It is a process of delivering goods to business customers rather than maintaining a large inventory of items that may not be used immediately.

This approach can help reduce waste, minimize inventory management costs, and increase customer satisfaction by ensuring that products are fresh and available when needed.

How does just-in-time (JIT) delivery work?

To practice just-in-time delivery, the suppliers need to sync orders with delivery schedules. The idea is to minimize the storage problem and maximize productivity.

Just-in-time delivery requires close coordination between the supplier and the customer, as well as efficient planning and just-in-time logistics techniques to ensure that the right products are delivered to the right place at the right time. It can be useful, particularly for businesses that operate in fast-moving or highly competitive markets, where the ability to respond quickly to customer demand can be a key advantage.

Here is how JIT delivery works:

1. The customer places an order for a product.

2. The supplier receives the order and starts the production process, using raw materials and other resources required to manufacture the product.

3. Then, the supplier transports the final product to your warehouse or storage facility, from where you are responsible for delivering the product to the customer’s doorstep.

4. Then, as the logistics services, you are required to deliver the product just-in-time for the customer to use it, often within a day or two of the order being placed.

The Role of Just-in-time Delivery in Inventory Management

Just-in-time (JIT) delivery is a key component of supply chain inventory management, as it allows just-in-time inventory companies to minimize their inventory levels while still meeting customer demand.

By delivering goods on an as-needed basis, businesses can avoid the costs and risks associated with holding large amounts of inventory, such as storage and handling costs, spoilage or obsolescence, and the risk of inventory becoming obsolete or losing value.

The Importance of demand forecasting in Just-in-Time delivery

Demand forecasting plays a central role in just-in-time (JIT) delivery services because it helps businesses to predict the demand for their products or services accurately. This allows them to produce and deliver the right amount of goods at the right time, which helps to reduce waste and improve efficiency.

JIT services is a logistics approach that aims to deliver goods to customers or production facilities as close to the time of need as possible. It is a key element of lean manufacturing and supply chain management, as it helps to reduce inventory levels and eliminate waste by only producing and delivering what is needed when it is needed.

So, accurate demand forecasting helps delivery business leaders to plan their delivery schedules accordingly. Demand forecasts improve the just-in-time delivery system to a good extent.

Implementing Just-in-time Services Successfully

To implement just-in-time services successfully, there are several steps you need to follow:

1. Establish good communication

In order to ensure that goods are delivered just-in-time, it is important to have good communication with suppliers to ensure that they understand your needs and make just-in-time delivery partners deliver the goods when required.

2. Train employees on JIT principles

Make sure that your employees understand the principles of just-in-time delivery and how it can help improve efficiency and customer satisfaction. Your employees must know the importance of just-in-time delivery services so they perform their jobs with maximum productivity.

3. Deploy route planning software

Deploying route planning methods can save you hours of delivery time. Also, route planning software like Upper Route Planner automates various tasks like route planning and route optimization saving your route planning time as well as fuel costs by finding the most efficient delivery routes.

Advantages and Disadvantages of Just-in-time Delivery

The concept of just-in-time delivery comes with some advantages and disadvantages:

Feature	Advantages	Disadvantages
Inventory Costs	Reduced storage costs, insurance, and inventory control	Increased risk of stockouts due to supply chain disruptions
Efficiency	Decreased lead times, faster response to demand	Increased reliance on suppliers for timely delivery
Quality	Reduced risk of using defective or outdated materials	Increased risk of production delays if suppliers fail to deliver
Flexibility	Easier adjustments to production based on demand	Limited customization options for products
Risk	Lower risk of excess inventory	Higher risk of production disruptions and lost sales due to stockouts

Advantages of just-in-time delivery

1. Reduced actual cost of inventory: By only receiving materials and products as needed, manufacturers can minimize the amount of inventory they need to store, which can reduce the costs of warehouse space, insurance, and inventory control. Also, it increases the availability of usable space in the warehouse.
2. Increased efficiency: JIT delivery can help manufacturers reduce lead times, as they do not need to order materials and products in advance. This can allow them to respond more quickly to changes in customer demand and reduce the risk of short production runs.
3. Improved quality: By eliminating the need for large amounts of inventory, JIT delivery services can help manufacturers reduce the risk of defective or outdated products being used in the production process.
4. Increased flexibility: JIT delivery allows manufacturers to adjust their production processes more easily in response to changes in customer demand or market conditions.

Disadvantages of just-in-time delivery

1. Dependence on suppliers: JIT delivery relies on the timely and reliable delivery of materials and products from suppliers. If a supplier is unable to meet their delivery commitments, it can disrupt the production process and cause delays.

2. Increased risk: JIT delivery means manufacturers do not have a buffer of inventory to fall back on in the event of production delays or other unexpected issues. This can increase the risk of production disruptions and lost sales.

3. Limited customization: JIT delivery is generally more suitable for manufacturers producing standardized products in large quantities. It may be more challenging to implement JIT delivery for manufacturers offering a wide range of customized products.

Level Up Your Just-in-time Delivery Process with Upper Route Planner

While implementing the just-in-time delivery system, you are required to fulfill deliveries as soon as possible. Most of the customers expect their orders in a day or two. To carry out on-time deliveries, you need a planned route to follow.

Using manual route planning or any ordinary route planning apps like Google Maps or Waze isn’t very efficient because there are certain limitations in it, like no route optimization, proof of delivery, dispatching, or reporting features.

On the contrary, Upper Route Planner comes with a primary feature of route planning and optimization. With route optimization, you can save up to 2 hours of route planning daily and up to 40% of fuel costs.

Once you get all the delivery details, you can directly import the excel or CSV file from your system to the Upper Route Planner and plan routes with multiple drivers in a minute.

Also, you get essential features like one-click dispatch, electronic proof of delivery, API integration, and reporting. Using these features makes just-in-time delivery easy and a less hectic job for you.

Conclusion

In this fast-moving world, you always face competition with similar business models. All you need is some implementation in your business that makes your business stand out from the competitors. Just-in-time delivery is a good option to cut down storage costs and deliver with better efficiency. It enables online businesses to establish a good customer-supplier relationship which is an important aspect of E-commerce logistics success.

Once implemented, you are required to fulfill on-time deliveries. You should adopt route planning software like Upper Route Planner to make this process quick. Upper plans and optimizes routes for your just-in-time deliveries, so you spend less time planning routes and achieving delivery targets on time.

Upper Route Planner provides a 7 days FREE TRIAL, so you can explore its robust features and experience seamless route optimization.