Just-In-Time delivery (JIT) is an inventory management strategy that helps companies run lean by boosting efficiency, reducing costs, and meeting customer demands for same-day and next-day fulfillment.
On-demand warehousing is a critical support for JIT as it provides scalable, flexible solutions that help manufacturing companies improve their bottom line while their customers reap the benefits.
What Is JIT, and Why Is It Important?
As our economy becomes ever-more competitive, cost efficiency is paramount. Companies that carry a lot of excess inventory are not cost-effective because they have a lot of goods sitting idle, taking up valuable real estate in the warehouse, and wasting time and effort in the factory.
JIT optimizes the supply chain process through every stage. From raw materials to the end-user, goods are manufactured and shipped when needed. This approach reduces inventory held in reserve and all its inherent issues, such as overstocks and stock-outs.
How On-Demand Warehousing Supports JIT Delivery
On-demand warehousing provides companies with local warehouse solutions, enabling localization of goods and materials. Whether you are entering new markets or fulfilling seasonal business cycles, on-demand warehousing helps you scale as needed, without the costs and commitments that are typical in a traditional warehouse lease scenario.
Warehouses Close to Manufacturing
In most cases, manufacturing facilities are not close to distribution hubs. They generally have a warehouse that is close to the factory where they store and manage their goods and raw materials, and in many cases, those buildings sit idle waiting for the next wave of activity.
On-demand warehousing helps these companies by eliminating that idle space, which can play out in one of two ways:
By allowing companies to monetize warehouse or rack space they are not using. In this scenario, companies can leverage unused space that would otherwise represent a loss. On-demand flexible warehouse solutions match customers with warehouses that have excess space near target manufacturers, a win-win for all stakeholders.
By accessing warehouse space only when needed. Companies that access on-demand warehouse solutions save large over the cost of a traditional lease. There is no staff to support, no payroll burden, and you only pay for what you need, when you need it. Plus, it offers the possibility of adding services, like kitting, that you may not have had the bandwidth for otherwise.
In either of these scenarios, downtime is reduced or eliminated, and the cost-efficiencies send significant value back to the bottom line.
Added Value in JIT Fulfillment
Organizations wanting to improve service levels generate added value using a just-in-time approach.
Localized inventory. Manufacturing facilities and their associated warehouses are not often “conveniently located” near distribution hubs, resulting in delays and increased complexity in fulfillment. A local warehouse improves reliability and customer confidence.
Faster order-to-fulfillment time. Today’s customers, whether they are consumers or other businesses, are more demanding than ever before. Offering same-day or next-day fulfillment is an excellent way to assure customer satisfaction and build loyalty.
In conclusion, on-demand warehousing delivers value to the manufacturing sector by reducing day-to-day operating costs and/or monetizing idle space. On-demand enables just-in-time deliveries while helping companies improve service to their target customers, accelerating order-fill rates, and improving customer satisfaction.
If you would like to learn more about on-demand warehousing and how it can help your organization, reach out today.