The Definitive Guide to Just in Time Inventory Management
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Just-in-time (JIT) inventory management is a term we have all heard in the business. However, do you know exactly what it means – both in terms of its definition as well as in terms of the impact it has on inventory management processes?
Not a lot of businesses truly understand what JIT is, and that turns out to be disastrous! Afterall, JIT is one of the most effective inventory management techniques out there, Employing it into your business can really help you evolve while keeping your spending at the bare minimum, which means it is a great strategy for all businesses; even the smaller ones that don’t have a lot of resources to spare.
However, you can only benefit from JIT if you know everything about it – which a lot of businesses don’t.
Let’s start off by understanding everything that we can about JIT inventory management.
A just in time inventory management definition is the first thing you need to grasp. Essentially, it is a form of inventory management that is meant to ensure that you are only purchasing/producing as many products that you need, and that too only when you need them and not any sooner.
Mostly, just in time inventory management is associated with the manufacturing industry. Therefore, it can be seen as an inventory management strategy that is focused on getting raw material orders from suppliers strictly in accordance with the production schedule. This would mean that you place your order for the raw materials only when you have orders from your customers and are ready to start the production process.
Generally, just in time inventory management is used by companies to receive goods only as they need them. This means that they can cut down on inventory costs, increase efficiency, and reduce wastage of products.
Of course, just in time inventory management can only be achieved where there is accuracy – since to ensure that you have got the timing and quantity of your production right is to align it perfectly with customer demand. This will involve a considerable amount of forecasting and planning as well, and hence, it should be noted that JIT is not something you should dive into without considering all these aspects. In the true implementation of these aspects, you will find the answer to what is just in time inventory management.
But more of that later!
Now that we know the just in time inventory management definition, let’s have a look at the history of just in time inventory management. It can offer an interesting way to understand inventory management, so let’s trace it right back to its origin: a post-WW2 Japan. The just in time philosophy, which was initially known as the Toyota Production System or TPS, originated in Japan after World War 2. It was used in car manufacturing by the Toyota company – set against the backdrop of extreme car shortages, the ultimate aim of this method back in the day was to minimise the use of resources and ensure that the cars being produced remain competitive and are actually bought.
Thanks to Eiji Toyoda and Taiichi Ohno, the Toyota Motor Company (TMS) realised that the US carmakers were doing a much better job of selling their cars than the Japanese. The TPS was the result of this realisation, and after implementing this method in their manufacturing, they managed to cover a huge gap in just a span of 25 years.
However, a bigger achievement is the fact that the world embraced the TPS method, now known as JIT inventory management wholeheartedly. It has continued to be employed by businesses in their inventory management processes, and has helped them establish operations that waste no resources and only produce as many goods as needed.
How Does Just in Time Inventory Management Work?
But how does the just in time inventory management system work to begin with? Well, first off, the JIT inventory management system ensures that the business is getting stock only as it is needed for production or to meet consumer demand. So, it’s kind of like you only get your stock in when you know exactly how much of it is going to sell. The main idea behind this is to reduce waste as much as possible and instead, focus on increasing efficiency of the production and the fulfilment procedure as a whole.
At the core, just in time is a lean management method. It operates solely on interconnectedness between all the aspects involved in the fulfilment process. For example; the people. There needs to be a certain level of communication between all the participants. Just like you need to understand what the customer needs and when they need it, your suppliers need to know what you want and when you want it. All of you must inform each other and maintain interaction throughout the process if you want it to be successful.
So, essentially, JIT works by connecting not only the processes with customer demand, but also by aligning all the participants of these processes together. All in all, it leads to better productivity, quality, delivery times, and customer satisfaction.
The penultimate question for business owners is this: how does just in time inventory management improve business? There are quite a few reasons behind a business can and should consider adopting just in time inventory management.
The number one reason, however, is cost. Every business wants to do everything in their power to ensure that the actual cash investment they are making into their business is as minimal as possible, but with great results. In this regard, JIT inventory management is a great option since it helps you make sure that your spending is less, but that you get more effective.
Implementing the just in time inventory management method into your operations means that you are saving money by employing a very simple method, which is regardless a lot more effective than some other, traditional methods of inventory management. So, the success of your business is only maximised if you use the just in time inventory management strategy
As such, there are many businesses that employ the JIT inventory management method. If you are wondering just in time inventory management would most help which business, then you’d be happy to know that the advantages of just in time inventory management can bless just about any business.
To understand this point better, let’s look at the different ways JIT would be employed in different businesses:
The just in time method is employed by many apparel businesses – in fact, it is the ultimate way to cut down the usually monumental expenses of maintaining an inventory in a clothing business.
Usually, stocking up in clothing is very expensive. Since there are different colours, sizes, and styles of each piece in the inventory, the overhead cost can be a little overwhelming.
However, if you use a JIT method, you can easily deal with all of this and only produce the items customers need, and that too just when the customer needs them.
As we have already discussed, the JIT strategy originated from inventory management processes of the automotive industry and was used to minimise the resources used in the manufacturing of cars.
To this date, it is an important strategy and can help businesses utilise their inventory space a lot better. Essentially, inventory management based on the just in time inventory management strategy helps car manufacturers ensure that their cars are competitive and that their production capacity is not unnecessarily exhausted.
Just in time inventory is also used in construction. In fact, in the construction industry, it can prove to be more useful than ever. This is because there tends to be a lot of waste that takes up inventory space and hinders the movement of other important assets.
With the help of just in time inventory management, these issues can be resolved as it ensures that only those assets and materials that actually contribute towards meeting customer demands. This is exactly why so many construction businesses not only employ JIT, but are also fans of lean inventory management methods in general.
The fast food industry is complicated, high-risk, and of course, fast-paced. For this reason, there will always be some ingredients that they need to keep onboard. However, almost every fast food business employs the JIT inventory management technique because food is only cooked when they get an order.
This means that they are only putting their resources to use when an order from the customer’s end is confirmed. Through this, they can ensure that there is less wastage and that the fresh ingredients are only used when the customer requires it.
Yes, you heard that right; even florists benefit from the JIT inventory strategy. So, employing JIT for a florist would mean that flowers only purchased when they get an order.
This would ensure that they are getting fresh flowers, and also that they are spending money only on the items needed to fulfil the order. On the contrary, if they buy flowers and other related materials beforehand, there is a good chance that there will be increased spoilage and they will more or less be pouring their money down the drain.
The healthcare industry can also benefit from the just in time inventory management method. JIT at work in healthcare would mean less expenses. This is extremely important for a health care business/organisation since the profit margins in the healthcare industry are tighter than in other fields.
Just in time inventory management method’s most common use is in the manufacturing industry. Since the method originated in the manufacturing industry, it really takes into account the fact that it is quite important for a manufacturing company to stay at par with industry standards, operate at lightning fast speed, keep discrepancies at a low, and save money.
JIT helps manufacturing businesses decrease flow times within production systems. It also helps improve customer satisfaction, supplier relationships, and boost productivity. In fact, many manufacturing businesses would swear by the efficacy of JIT because it has repeatedly helped many companies improve their game.
Just because just in time originated in the manufacturing realm doesn’t mean that it can’t be employed in a retail business. In retail, just in time inventory management means that you focus on having just enough inventory to satisfy demand and nothing more.
In the retail industry, there is a misconception that surplus stock is beneficial. While it is always good to have safety stock at hand, having a large amount of surplus causes more detrimental than benefits; especially if you are struggling with money. Therefore, employing JIT in their inventory management is a practice that a lot of retailers resort to in order to boost their order fulfilment efficiency, save money, and organise their inventory in a much better way overall.
The point is, you don’t have to ask yourself “just in time inventory management would most help which business?” before you actually get into it, since it is likely to help any business that incorporates this strategy in their operations smartly and effectively.
The point is, you don’t have to ask yourself “just in time inventory management would most help which business?” before you actually get into it, since it is likely to help any business that incorporates this strategy in their operations smartly and effectively.
So, if you were looking for a sign to finally turn to JIT in order to make your inventory better, this is it! Because it helps almost any and every business, the nature of your venture shouldn’t affect the efficiency it presents you with.
The usage of just in time inventory management doesn’t end with the list above. We already know that Toyota is a company that can be looked at as a real usage of just in time inventory management examples. In fact, there are many renowned brands that use just in time inventory management to improve their inventory management costs, efficiency, and speed.
Some prominent examples would include the following companies:
Remember, this list is not exhaustive and in reality, there are many businesses, both big and small that use just in time inventory management in their operations. This is not surprising, since there are many advantages of just in time inventory management that businesses can only introduce themselves to with an effective employment of the strategy.
Perhaps the biggest advantage of just in time inventory management is that it helps a business improve its ROI – just in time helps you cut down on spending and increases your income instead by boosting efficiency of your processes.
If you are wondering how does just in time inventory management improve business; it does so by providing the following, irresistible benefits:
One of the biggest priorities for any business is to decrease waste. More waste means more money: if you are dealing with a lot of waste, you are essentially unnecessarily spending precious pennies on something that can be avoided.
With the just in time inventory management model, you can avoid this. This is because the strategy is aimed towards reducing overordering and ensuring that you are not spending money on excess products that make no tangible contribution towards your revenue.
There are essentially two ways you can reduce waste with the help of just in time inventory management. First is by actually minimising the amount of obsolete and dead stock in your inventory. Believe it or not, obsolete stock can take up not only space, but also deplete your resources if not managed and gotten rid of on time.
Another way that it helps is by decreasing defective product loss. When your inventory levels are low and only enough for you to meet customer demand, it is a lot more convenient for you to identify defects and other issues with the stock. Early detection means that these issues can be fixed on time instead of going to waste, and hence, it is beneficial if you are focused on decreasing your inventory management problems.
For any business, efficiency is linked to more sales, more customer satisfaction, and better revenue. Just in time inventory management helps you increase efficiency by taking unnecessary inventory out of the equation and instead, focusing primarily on product inventory that is aligned with customer needs.
With the help of JIT, you can raise your inventory turnover ratios and as discussed above, decrease the amount of obsolete products that you’d have in your inventory. Not only that, just in time is also a good way to make sure that you are getting your raw material and other deliveries in the smallest quantities. Not only does this mean a smaller inventory, but it also means less work for you and your employees.
The internal processes of your warehouse, distribution centre, and manufacturing factories matter a lot, which is why a lot of businesses strive for productivity. Luckily, JIT can help you with this as well.
With the help of JIT, you can ensure that you have a faster product turn around, shorter production runs, and speedier fulfilment in general. It can also help you simplify your purchase order procedures, so that you don’t have to waste time on the unnecessary formalities and can instead focus on things that will increase the overall productivity of your operations.
One of the most effective ways of ensuring that your manufacturing business flourishes is to ensure that the production flow is seamless and free from any discrepancies. Since just in time inventory management is focused on keeping your inventory low and necessity-based throughout, it really helps with this factor.
With the help of JIT, you can achieve shorter product cycles. The strategy is aimed towards reducing the overall manufacturing time, which means that you can get orders across to customers in a shorter period of time. Not only that, but just in time inventory management also helps you considerably cut down on defective products. You can spot production mistakes and fix them on time. All in all, you get a much smoother production flow.
Whether you are a small business or a larger establishment, saving money on your inventory management operations is a great way of ensuring your success in the longer run. This is because the lesser your investment is, the more margin you can keep for the profits.
Perhaps one of the best things about just in time inventory management is that it helps you cut down on your cost. It helps you reduce your working capital and well as considerably minimise your overall holding costs. By ensuring that you only have in stock what you need, just in time is all about putting your resources on the right thing instead of wasting it unnecessarily on other things. Even the labour cost is bound to decrease with help of just in time, since it reduces the number of person-hours needed to fulfil orders.
At the end of the day, if the quality of your products is compromised, you can’t really win the hearts of your customers – even if your delivery timing is and the whole fulfilment procedure as a whole is completed at a lightning fast speed, it won’t really matter if your products aren’t up to the mark.
JIT calls for timely problem detection and can help you ensure that there are no discrepancies or issues with your production before it reaches the customer. It also means less damage, since only minimal inventory needs to be taken care of. With just in time inventory management, you will cut down on the inspection time as well since any problems that you come across will not only be spotted but also ideally fixed during the production itself, instead of going through an elaborate “inspection” and causing unwanted delay.
In short, the advantages just-in-time inventory management brings to the table are vast and varied in nature. In addition to the list above, some other ways just in time inventory management brings to the table are:
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At this point, it is safe to say that we have made our case for the fact that just in time inventory management, for the most part, is good and beneficial for every business. However, if you are looking to incorporate this strategy into your operations, you will have to look beyond the basic and understand both the pros and cons of relying on the just in time method.
So, how does just in time inventory management improve business?
First, let’s sum up with just in time inventory management can be a good choice for you. If you are looking to cut down on expenses, just in time is a great option. We have discussed this in detail above, but just in time is specially geared towards preventing you from spending money on those aspects of your business that don’t need it. So, regardless of the size and nature of your business, if financial cuts are your priority, then just in time can come to the rescue.
Other than that, just in time can help you reduce waste, increase the flexibility of your production processes, utilise your human resources better, and enable your workers to work together as a team. It is a great way of boosting productivity, which is why it can be employed as an efficiency mechanism within your inventory management processes.
Many businesses consider vendor managed inventory vs just in time to be similar because in both of them, you are dependent on the vendor/supplier in some way. However, when it comes to actually analysing the vendor managed inventory vs just in time debate, it is pretty obvious that just in time inventory management is a much better option since it allows you to have a much stronger control over the trajectory of your inventory management processes.
As good as just in time inventory management can help you improve your business, there are certainly some drawbacks of the method that you should certainly be aware of in order to make informed choices.
In this regard, the main thing to keep in mind is that the only way you’re just in time inventory management methods can be successful is if your forecasting game is strong. So, in order for inventory management to actually work and elevate the success of your business, your forecasts and planning need to be precise and accurate.
Other than that, you need to have a strong relationship with your supplier. If you want the just in time method to be seamlessly incorporated into your business operations, you need a supplier you can rely on – because the last thing you want is to be left hanging in the dark by your supplier. If you don’t have a functional relationship with your supplier where you communicate frequently, then just in time can turn out disastrous for you. If they fail to show up with the needed materials and goods even once, the whole fulfilment procedure can take the worst turn for you!
Keeping these aspects in mind, let’s look at some risks that come with the just-in-time inventory management strategy.
In order to implement the just in time strategy, you might have to make some changes to the existing structures of your organisation. This is because this strategy can only thrive under certain conditions, and if they are not in place then you might as well not rely on just-in-time. If you want the strategy to be successful, you will have to transform your entire workflow in a way that fits the lean management style, which might not be feasible for every business.
If there are any disruptions in the supply chain, the chances that your just in time inventory management is going to topple are more palpable than ever. In that sense, we can state that just in time works the best if every process across the supply chain is seamless and smooth, without any major disruptions. However, to expect that is unrealistic, because there will be at least some little hiccups along the way. Unfortunately, JIT doesn’t take these too well!
In case things go wrong under the just in time inventory management way of doing things, you will end up missing sales. Say, for example, you get an unanticipated, huge order for your best selling process. You reach out to your supplier for the necessary deliveries but they inform you that they can’t help you, since they are facing a shortage. No matter how big the order is and how much profit it promises, you will have to turn it down. Just in time doesn’t have space for safety stock that can help you in a situation like this, which is why it is one of the biggest drawbacks of the strategy.
The truth is, having a just in time inventory management strategy in place means that you are taking away a huge chunk of your adaptability. For example, what if you face unexpected price changes? The cost for parts in the just in time strategy is constant – in case the cost does increase, you can’t increase the profits accordingly, and will have to work with a compromised margin. Needless to say, this makes a lot of businesses hesitant from diving into the just in time inventory management.
As we have already discussed, you can only expect your just in time techniques to succeed if you already have a forecasting mechanism in place. If there is even a slight discrepancy or inaccuracy with your forecasting methods, then just in time won’t work and in turn, might even lead to loss. This translates into overreliance on forecasting, and in the case of sudden declines or urges in customer demand, can leave you stranded.
In order to implement just in time inventory management, you have to source your material locally. However, this can cost you more money, depending on what your locality is. For example, if you are in a big city and so is your supplier, their costs are likely to be higher than a supplier who is based in a smaller locality. However, for the sake of just in time inventory management, you will have to rely on the local source rather than the more cost-friendly option.
As the name of the strategy suggests, just in time is all about running against the clock. One of the biggest disadvantages of just in time, in our opinion, is that it imposes quite a strict deadline and time pressure on businesses. While some companies can thrive under this challenge, others don’t and may end up causing more harm to their inventory than good.
Your relationship with your supplier is at the core of just in time inventory management. Your course of dealings should be seamless and devoid of any conflict if you want to rely on them to fulfil your orders even at the last minute. This means that you are totally dependent on them, and if, for any reason, they fail to meet deliverables, you will have to be answerable to your customers.
With just in time, even acts of nature can disrupt the supply chain. For example, a natural disaster like a hurricane or an earthquake is more than likely to disrupt your supplier’s flow of goods; a disruption that will definitely cause problems for you and your fulfilment processes as well.
As you can tell, there are quite a few disadvantages and risks that are associated with the just in time inventory management. However, it may also be right to note that no matter what inventory management method you go for, there will always be a certain space for things to go wrong. What matters is how you prepare to overcome these problems, and hence many of these risks can be mitigated with the help of a simple plan B.
If, after looking into the risks of just in time inventory management, you still believe that your company could benefit from this strategy of inventory management, then there are some other things that you should understand in regards to the JIT method.
The first thing that you need to do is assess your organisation properly and see if it is ready for the just in time inventory management strategy. To do this, ask yourself the following questions:
Only if the answer to all of the questions listed above is yes, can you confidently say that you are ready for just in time inventory management!
There are many ways that you can incorporate just in time inventory management into your business operations. In fact, the just in time inventory uses a variety of techniques simultaneously in order to help a business succeed.
However, to start off, there are only five steps that you need to implement into your operations:
For JIT to be successful, all other processes in the supply chain must also be streamlined. This means that your manufacturing plant as well as your warehouses need to be fully optimised in order for things to go smoothly.
The first step, therefore, is to optimise your warehouse and equip it with end to end automation as well as the latest technology. Doing this, you will essentially be ensuring that there are no supply chain disruptions and the JIT methods are incorporated successfully.
So, for example, in a manufacturing plant you will benefit if you make sure that all the equipment is in working order as well as the fact that the plant is fully clean. This will help you move things faster, and since just in time already has very strict deadlines, this can help you do better in terms of speeding things up.
This aspect cannot be stressed enough. At the end of the day, the success of your just in time inventory management methods is highly dependent on your suppliers, which is why you should make sure that you are only working with the best of the best.
Since just in time can only be done with the help of local suppliers, this step should involve you properly researching your local market and finding good suppliers that don’t only have a strong record of working with similar businesses to yours, but can also promise you JIT support, reliability, and speed!
Just because inventory management is based on time doesn’t mean that you should sacrifice on the quality of your products. If anything, you should establish an effective process of inspection and quality control during the production and purchase process.
Once you do this, the JIT processes will be even faster and you will be making sure that the end products delivered to your customers are high quality – to the point that they bring their business back to you.
As supply chain disruptions are one of the biggest reasons behind just in time inventory management not succeeding like it should, it is a good idea to try your best and tighten up the supply chain.
Look for turnkey solutions that will help you benefit from an improved production flow. In addition, try to get solutions from a single supplier instead of multiple vendors since this can unnecessarily complicate things and make optimisation harder for you to achieve.
And lastly, you have to prepare for the worst. Even after you do everything the right way and make sure that you have implemented all the important safeguards for just in time inventory management in your operations, there still might be something that could go wrong.
In that regard, it is important for you to have a plan. Perhaps it could be wise for you to deviate a little from the JIT for the purposes of a plan B, and keep some safety stock in hand. For example, you could observe which products are likely to be sold every month and then accordingly, keep a certain portion of those products as safety stock.
The key point is to prepare yourself for any unfortunate circumstances that you may have to face. This will make just in time inventory management a lot less riskier and will ensure that you can benefit from it in a much better way.
If you want to have a just in time inventory management strategy in place that actually contributes towards the success of your business, a good thing would be to invest in a just in time inventory management system.
Using inventory management systems, especially a just in time inventory management system, can really help you automate tons of processes that would otherwise require you to spend an unnecessary amount of brain power on them.
With the help of a just in time inventory management system, you will be ensuring that your stock levels stay low and lean throughout, and that whatever you have at hand and in storage is monitored properly.
Since the best just in time inventory management system will be cloud-based, you can access your inventory, inventory activity, and stock insights from any smart device, including mobile phones. This means that you can stay in touch with your warehouses and distribution centres without having to be there physically.
It would be not wrong to say that the best way of implementing inventory management is by leveraging a just in time inventory management system. However, it shouldn’t be just any software! Choosing the wrong software can actually be quite detrimental to your operations, which is why you should put extra thought into choosing your just in time inventory management solution.
Before we zoom in on just in time inventory management system, let’s take a look at at the top three
benefits of an inventory management system:
We’ve already looked at how just in time inventory management is basically all about knowing how much to order, and when to order it. This is exactly what an inventory management system helps you with.
By helping you track your inventory and organise your stock in accordance with customer behaviour, an inventory management system is the best option for businesses that are aiming to refine their inventory management processes.
Some inventory management systems may hurt your pockets in the beginning, but in the long run, you will witness how significantly an inventory management system can reduce your costs and ensure that you are not wasting your money.
An inventory management system is an investment that will surely prove to be beneficial for you as your business grows. This is not just because it will help you identify problems beforehand and fix them timely, but also because an inventory management system offers scalability that many businesses need to secure before they think of expanding their activity.
From warehouse operatives to your managers; your workforce is the most valuable asset of your business. This is because the way a well-equipped workforce can help you prosper will always remain unparalleled.
To make that possible, however, you need to make sure that you give your employees the technological means to be productive and make tangible changes to your progress. This is where an inventory management system steps in and makes things easier for your employees. By making sure that they are not burdened with things that can easily be automated, you will be boosting their productivity, which will translate into more efficiency in the workplace.
Since a just-in-time inventory management software can help make or break your business, you must make the right choice when picking one. Knowing which features are important will help you make sure that you are picking the right software.
Some features you should look for in your just in time inventory management system include:
Barcode and tagging is a great way of organising your inventory using the just in time method. Hence, your inventory management system should offer you the ability to implement these solutions in your warehouse.
To go a step ahead, try and look for an inventory management system that not only offers barcode scanning, but also equips you with RFID technology. Although not as common as barcodes, RFID tags are also being increasingly used in warehouses to streamline inventory management and stock handling procedures.
Essentially, if you have an inventory management system that offers these scanning and tagging modules, you will be able to maintain a precise record of all your products and also ensure that they can be located easily when you need them.
Another feature that can really help you refine your just in time inventory management strategy is the real inventory tracking feature that a good software system will definitely provide you with.
In order to ensure that everything is running smoothly and that there are no major discrepancies in place at your warehouse or distribution centres, you need to keep an eye on each and every thing that happens! Whether it is batch lot tracking or RFID tracking, a good inventory tracking mechanism will help you ensure that the fulfilment procedure is seamless.
Inventory tracking mainly includes product tagging and tracking, regular reports and audits, and other inventory tracking solutions that basically make it easier for you to keep your stock in track, minimise misplacements, and also implement just in time methods in a much better manner.
Another thing your inventory management software should provide you with are reporting tools. Most inventory management systems will help you gather data. However, only the best ones will equip you with the tools and methods needed to make sense out of this data.
In this regard, reporting tools are very important because they help you make comprehensive, insightful reports out of your data which can then be used to make informed, future-proof business decisions.
When it comes to just in time inventory management, we have already discussed that accurate planning and forecasting is an important component of setting up this strategy. With the help of reporting tools provided by a good just in time inventory management system, you can ensure that you correctly plan your operations, assess the progress of your business, and make just in time decisions that don’t take a turn for the worse.
Ideally, a just in time inventory management system should help you access your records and history when you like. This is very important because you can only improve your operations if you are able to get an overview of what your business activity has been like since day one.
Luckily, this feature is not hard to find and almost all inventory management systems offer you this. This is one of the biggest reasons why inventory management systems have the upper hand over physical or manual inventory management methods. It helps you keep your inventory optimised consistently.
If you are opting for a just in time inventory management system that is cloud-based, you won;t have to worry about your location when it comes to using it. In this sense, it is more convenient to use than an on-premise solution and accordingly, helps save time, money, and energy on your solutions.
Not only that, but it is also more effective because it provides you with real-time updates. NO matter what your physical location is, your just in time inventory management will keep running and will help you access your inventory management activity on any device from anywhere in the world.
Needless to say, this feature is important if you are planning to eradicate defects, damage, and also minimise employee negligence in every possible way that you can.
Before we making the final choice for a just in time inventory management system, you should ask yourself the following questions as a sort of a checklist that can help you:
Every inventory management system provides different features. You might find a software that aligns with your needs as a retailer, but it wouldn’t work for you if you were a manufacturer. For this reason, it is very important to be clear about what kind of a business you are, because this will give you a clearer idea about which software to pick.
The size of your business is also a factor you need to take into account before you select a just in time inventory management software. This is because what is good for a small business may not be a good fit for a large establishment, and vice versa. Similarly, you might want to look at whether you are working with a one dimensional business model or a multi-channel sales model. A multi-channel sales model, for example, might require you to invest in slightly more advanced features whereas you might be able to pull off good inventory management with simple, to-the-point solutions if you are only selling on one channel.
Your finances also matter when it comes to picking the right software. All inventory management solutions are priced differently and again, the main thing for you should be to align a potential software with the needs of your business and see whether it will be worth spending money on it or not. Remember that an inventory management software is an investment, and if you find something that fits your needs but is a lot over your budget but you can afford it, then you should not hesitate before making the purchase, since it will only help you in the long run.
You should know exactly what problems you are planning to tackle with your inventory management solution before you invest in one. Are you looking to improve your delivery times? Implement higher quality control? Optimise your warehouse space? Whatever it is, you should be aware of it before you make the purchase decision because whatever inventory management solution you go with aligns well with your needs.
And of course, you need to be sure if you are ready to implement the just in time inventory management method. We have already discussed how you can be sure if you are ready for it – it will help you make a better choice for an inventory management system. If you find that you cannot focus on just in time just yet, then you can go for any inventory management solution that fits other needs. However, if you find that you do indeed want to implement the just in time inventory management method, then you will have to look for an inventory management system that provides you with relevant features.
Just in time inventory management can help you achieve better inventory management, more efficiency, and more success. It is a solution that works for almost every business, so you definitely need to consider it if inventory is an area you struggle with and want to improve, but also want to make sure that you are not spending too much money or wasting your resources on its upkeep.
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