Just-in-time delivery

Definition

Just-in-time delivery is a strategy used in supply chain management that aims to increase efficiency by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This approach connects to the idea of resource allocation during crises by ensuring that resources are delivered exactly when required, which can help organizations respond quickly and effectively to changing demands and unexpected challenges.

5 Must Know Facts For Your Next Test

1. Just-in-time delivery minimizes the need for large storage spaces, reducing overhead costs associated with warehousing.
2. This method relies heavily on strong relationships with suppliers to ensure timely deliveries and maintain production schedules.
3. In crisis situations, just-in-time delivery allows organizations to adapt quickly to fluctuations in demand without overcommitting resources.
4. Any disruption in the supply chain, such as delays or shortages, can significantly impact production schedules due to the reliance on immediate availability.
5. Just-in-time delivery aligns with principles of lean manufacturing by aiming to eliminate waste and improve overall efficiency.

Review Questions

• How does just-in-time delivery improve resource allocation during crises?
  • Just-in-time delivery enhances resource allocation by ensuring that supplies arrive precisely when needed, allowing organizations to quickly adapt to crisis situations. This approach prevents overstocking and reduces waste, enabling better financial management during uncertain times. When faced with a crisis, being able to call upon timely resources can lead to faster decision-making and more efficient operations.
• Discuss the potential risks associated with just-in-time delivery in the context of crisis management.
  • While just-in-time delivery can be beneficial for efficiency, it poses several risks during crises. The most significant risk is supply chain disruption; if suppliers face delays or shortages, production can halt due to the lack of necessary materials. This creates vulnerabilities, as organizations may not have buffer stocks to rely on. Additionally, any unforeseen changes in demand can exacerbate these risks, leading to a mismatch between supply and needs.
• Evaluate how just-in-time delivery might influence an organization's resilience during unexpected disruptions.
  • Just-in-time delivery can enhance an organization's resilience by promoting adaptability and efficiency; however, it also introduces vulnerability due to its dependence on precise timing and reliable suppliers. In unexpected disruptions, organizations with strong supplier relationships may pivot more effectively and manage resources better than those with traditional inventory practices. Conversely, if disruptions occur frequently or unpredictably, reliance on just-in-time strategies may hinder resilience by limiting available resources when they are most needed.

Related terms

Supply Chain Management: The management of the flow of goods and services from the point of origin to the point of consumption, including all processes that transform raw materials into final products.

Inventory Management: The supervision of non-capitalized assets, or inventory, and stock items, focusing on ensuring that the right amount of stock is available at the right time.

Lean Manufacturing: A production practice that considers the expenditure of resources in any aspect other than the direct creation of value for the end customer to be wasteful and thus a target for elimination.