Just In Time: Once the Go-To for Manufacturing. Once.

Just in Time, for the longest time, has been the most profitable system for mass production manufacturing in America. In its heyday, the system was lauded as the most efficient model out there whether you’re making jet skis or jars of jelly.

But as the world evolves, we must evolve too. Changes in the world are forcing companies to look, relook, and re-relook at how they conduct business. Every option must be explored, including having multiple options. Having a second source like Priority Plastics for your packaging needs ensures you have that backup ready to go if the unpredictable happens.

Just In Time: Time to Take a Closer Look.

First off, we can all thank automobile manufacturing. Back in the 1970s, car manufacturers implemented a production system more commonly recognized in the business world as Just in Time manufacturing. Just In Time is classified as a management strategy aligning raw material orders from suppliers directly with production schedules. This leaner manufacturing system was introduced to make vehicles ordered by customers much faster, all with the ultimate goal of keeping costs low and profits high.

The system wasn’t an overnight success. In fact, it took two decades of ongoing improvements to pursue perfection. Car manufacturers wrestled with a substantial setback at one point. In 1997, a large fire broke out at a Japanese-owned parts supplier known for producing P-valves, which led to a significant shutdown. Because this parts supplier was the sole supplier of P-valves, the car company’s production came to a standstill for days. Once that domino fell, more followed. Other suppliers were forced to shut down as the automaker couldn’t do anything with the parts while production slammed to a halt. The price tag of this fiasco: a loss of 160 billion yen (or $1.2 billion American dollars). The lesson: have a second, backup supplier ready to go. More on this later.

Regardless, Just in Time did deliver a bevy of advantages to the many manufacturers willing to embrace this approach.

Inventory is minimized. Greater organization and accountability mean no overlap or excess need for goods.

Efficiency is increased. Small production houses lacking funds to purchase huge amounts of stock see Just in Time’s methodology as an ideal solution. It’s easier to maintain a healthy, smooth cash flow.

Waste is reduced. Quicker stock turnaround keeps goods from becoming damaged or even obsolete just rotting away in storage units. It saves money by preventing any unnecessary stock that eventually would need to be replaced.

Resources are reallocated. Anticipate a faster turnaround of stock. You won’t need to fork over fortunes to rent or buy warehouses or storage space to hold your goods and materials. Funds are freed up for other parts of your business.

Juggernaut retailers also use JIT better than any other companies on the planet. Their inventory management is widely considered one of the most celebrated reasons behind their categorical success. Cross docking systems allows supplier’s trucks to meet at warehouses, which deliver goods to the stores just in the nick of time for employees to restock depleted shelves. Efficiency to a T.

Just In Time: Time to point out its downsides.
While Just in Time stood its ground for many years, it started to show some serious side effects.

Carrying less stock is a good thing…and possibly a bad thing. You base your stock off the ebbs and flows of demands. If they happen to be off, then you will not have stock backed up and ready to go when your consumers need them.

Supplier dependency can be a dicey proposition too. Having to rely on suppliers to complete each order in a timely matter could put you at risk of delaying your customers’ order. If you can’t meet consumer expectations, wave goodbye to your business as it seeks out your competitors. The plan of attack: bring aboard another strong reliable supplier and maintain a healthy relationship with them so you can make sure you can access materials in a heartbeat. (Hint hint. Wink wink.)

There’s also a substantial learning curve involved, where the inventory management requires companies to keep sales trends and variances under a microscope. Simply meaning, a number of products will need a higher stock level to take consumer demand head on. It’s imperative to ensure your supplier can fulfill those requirements to avoid any uneasy consequences.

Progress over the past 50 years within the global supply chain has indeed produced improvements in timing, efficiency and connectedness. Still, Just-in-Time inventory has dealt with hiccups between Covid-19, geopolitical monkey wrenches and disruptive weather events that revealed disturbing weaknesses. Increased demands and customer satisfactions didn’t help matters either. Logistics continue to rise 22%, and still business operations rely on antiquated models for business as usual. There became an uneasy overreliance on how businesses felt impregnatable and thus, stuck to their guns on their production models. Look no further than recent airline holiday debacles to see how well that worked out.

Covid-19 has been the surface level answer everyone’s screaming as the primary cause of supply chain issues. It’s not. All the pandemic did was pull back the veil on the inadequacies of ignoring the fragility of
the supply chain and not having the proper pieces in place. Most were not ready for it. At all.

Just in time lowered costs for sure. But running lean and reducing inventory dominos into unprecedented levels of unpreparedness. A sudden rise in snack demands. The freezing temperatures that beleaguered Texas a year ago. Unpredictable factors contributed to showing a new process was needed and needed now.

To recap, here’s a snapshot of all of the issues compounding Just in Time:

  • Problems with forecasting
  • Unforeseen events and disasters.
  • Dealing with sudden and surging demands.
  • Extra training and planning.
  • Uncontrollable supply chain.
  • Rising customer satisfaction.
  • Overreliance on a single supplier.

Just in Time: Time to bring on a second source.

Just in Time flat out doesn’t work in this modern age. The reality is simple: adopting a new strategy is a must.

Modernizing your business is worth the smaller investment today to prevent larger, potentially unfixable, and far more expensive problems tomorrow.

It’s easy to immediate dismiss the notion of bringing on a second source for your packaging needs. The all eggs in one basket mentality may on the surface look like the most efficient option. But not having a parachute when the system goes off the rails could be catastrophic to your business.

With Priority Plastics, you have three central U.S. locations that didn’t happen by accident. Our manufacturing facilities in Indiana, Iowa and Colorado answer the geographic challenges threatening the supply chain. You can plan ahead for any scenario when disruptions emerge.

It goes beyond facilities. Investing in people, technology and resources are the primary reason we’ve managed all the curveballs today’s world has thrown us. We are dedicated to quality. We are committed to meet timelines, specifications and preferences. We believe in create flexible stock mold solutions, all while ensuring each and every one of those solutions stresses quality.

It’s a no-brainer. Say yes to Priority Plastics as the second source who puts you first. Systems will always come and go. We’ll always be here you.

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