“Did you not maintain the right proportion of stocks in your inventory?” If you haven’t then it’s likely that your customer will make the effort to tell you one thing – that it’s not their concern. Or, they’ll be kind enough to walk away, without a word, to the next company with an efficient supply chain process. Take it from your reliable Management Consultant in Chennai, any of the two is likely to happen, which is why maintaining an inventory management system will streamline business for you.
Here’s what every organisation with a supply chain process needs to understand about inventory – some items need JIT or Just-In-Time inventory management whereas some need JIC or Just-In-Case Stocks inventory management. In this blog, we will explore the significance of the two, and how to use both to balance your inventory efficiently.
The Significance Of JIT And JIC
Most of your customers shop online to accelerate the purchasing process. They know what they want, how to read the reviews of products and understand their features before buying online. This means they won’t need to step out of their comfort home to buy your product when they find it online and click on the Buy Now button.
However, if your supply chain process is blocked by inventory management problems, that’s a real problem. This is why it is important to understand the significance of JIT and JIC, and the balance between the two.
83% of organisations believe that supply chains can help enhance customer experience. At the same time, in 43% of cases, smaller companies do not track their inventories. 21% of small businesses do not have a proper inventory management system.
Therefore, it is imperative to use this information as your way to score points with your customers. How about being the one with an efficient supply chain process by learning how to balance between JIT and JIC.
JIT or Just-In-Time Inventory Management is a strategic approach that is widely used. The approach is to receive goods closest to when they are needed. This method benefits companies in the following ways:
– Minimizes the cost of supplying goods on a regular basis.
-Helps reduce wastage from having to order extra and not use them.
-Improves efficiency while responding to customer demand more effectively.
At the same time, JIC, also known as Buffer or Safety Stock is a counter approach used to address the shortcomings of JIT. Companies that typically function on dynamic supply chain processes, unpredictable customer demands, and long lead times.
When Is JIT Needed?
-It also prevents the risk of having excess inventory that may not be required in the future, hence wasting away.
-JIT is needed when the organisation has lower inventory levels, they require less space. This means they can free up valuable real estate space.
-JIT enables companies to respond to market fluctuations, which can lead to customer satisfaction.
When Is JIC Needed?
-One of the obvious reasons is avoiding the risk of running out of far-reaching, urgent, and crucial stocks. This is especially necessary during natural disasters, disruptions in transportation, and unexpected rises in demand.
-JIC also helps in purchasing bulk quantities that typically lead to cost savings.
-Products are available during seasonal demands and long lead times.
So, if your company deals with a dynamic market, you have to be able to segment the stocks that go under JIT and the ones that go under JIC. This can help you streamline your supply chain process, and achieve customer satisfaction. To prevent your customer from moving on to a competitor, keep revisiting your inventory management strategy, especially during major disruptions in customer demand, and market fluctuations.