How Mobility Can Support Just-In-Time Supply Chain Models of the Future
Known for their lean approach to inventory management, just-in-time models came under scrutiny when the pandemic emerged. Here’s how mobile technology can help companies leverage JIT without sacrificing on customer service.
Focused on minimizing inventory and increasing efficiency, the just-in-time (JIT) supply chain model caught on quickly in the 1970s when Toyota adopted it and introduced it to the world. Wanting to make customer-ordered vehicles as quickly as possible, Toyota Production System (TPS) combined “automation with a human touch,” with the goal of only producing enough to support the next process across a continuous manufacturing flow. With this approach, the automaker could meet consumer demands with minimum delays, decrease its costs and increase its efficiencies.
Fundamentally, JIT is about using materials when they arrive on site versus allocating money and physical space to inventory storage. A concept that’s evolved to encompass other management philosophies (e.g., “lean” and “Six Sigma”), JIT came under fire when the COVID-19 pandemic sent shockwaves through the world’s supply chains. Seemingly overnight, the combination of factory shutdowns and panic buying emptied store shelves around the world.
Many blamed companies’ lean inventory, management and inventory tactics for lessening the resiliency of the world’s critical supply networks. By September 2020, 62% of the 150 manufacturing executives that law firm Foley & Lardner LLP surveyed said their companies would be decreasing their focus on JIT.
“Companies traditionally focused on optimizing inventory, leveraging offshore sourcing and just-in-time processes to reduce costs. Not anymore,” XPO Logistics’ Erik Caldwell told Reuters. “COVID-19 disruptions made it difficult for them to manage their supply chains.”
Managing Supply Disruptions
As supply disruptions continued well into 2021, , goods including semiconductor, resin, electrical component, lumber and bacon shortages were just some of the documented shortages that made headlines. But not everyone was pointing a finger at JIT as the culprit. When done well, writes Ken Eakin in The Lean Post, “JIT or lean manufacturing is a wonderful thing that can bring many benefits to workers, owners, and direct customers (distributors and wholesalers).”
The author of Office Lean: Understanding and Implementing Flow in Administrative and Professional Environments, Eakin says JIT helps create cost savings by allowing organizations to work with less inventory. “It asks suppliers to deliver small batches of materials and parts more frequently so that the factory does not need to carry excess raw materials,” Eakin writes. “JIT balances and coordinates its production lines to minimize its work in process. And it ships finished goods to customers frequently in small batches as well.”
Not ready to abandon their JIT models, organizations are now rethinking their pre-pandemic manufacturing and/or distribution models and looking at how they can continue to save on overhead costs, push inventory faster and make use of limited resources in this “new normal” operating environment. Knowing how quickly customer demand fluctuations can turn a lean inventory model on end, smart companies see the JIT-technology connection as one key to more resilient and efficient supply chains.
Mobile Devices Enhance Supply Chain Visibility
Supply chain visibility, or the ability to track products as they travel from supplier to manufacturer to consumer, is one area where technology is no longer a nice-to-have. In fact, it’s an imperative for 92% of the executives surveyed by Foley & Lardner, which says that the pandemic also accelerated “the adoption of new technologies and innovative business processes that improve supply chain efficiency and resilience.”
To achieve true visibility companies need to integrate a variety of their supply chain systems (for example: Order Management System (OMS), Enterprise Resource Planning (ERP), Materials Requirement Planning (MRP), Warehouse management (WMS), Transportation Management (TMS)). By deploying mobile solutions at the edge of their networks, organizations can achieve their desired balance of supply without forcing them to stockpile excess inventory. Integrating these mobile solutions may also require rapid application resources to fully connect the smart edge technologies to the integrated systems, something that Panasonic has been assisting customers with as they develop their connected digital supply chain footprint. Rugged tablets and handheld devices like Panasonic TOUGHBOOK®, for example, help companies effectively move goods through the supply chain. They also help increase efficiency by allowing manufacturers and retailers to balance appropriate inventories with on-time deliveries. Mobile devices also enable real-time operational visibility, enhance decision-making and improve order processing and customer service from the warehouse through to delivery.
In the warehouse or DC, these mobile devices also support real-time operational visibility, enhance decision-making, improve order processing and support a good customer experience that starts at the point of fulfillment and extends right through to final delivery. By equipping employees with rugged devices for barcode scanning; inventory tracking; picking, packing and sorting; quality control and other functions, companies are creating connected environments that help companies leverage JIT while also building out stronger, more resilient supply chains.
“It’s about organizations staying connected and in communication with their trading partner networks for even greater supply chain visibility and efficiency,” SupplyChainBrain points out.
“Mobile devices will continue to play an important role as organizations continue to digitally transform the entire supply chain—at every point of intersection between the workers and the goods they are moving.”
Equipped with a birds-eye view of their inventory, companies know what’s in stock, where the products are located, how quickly/slowly they’re selling and what they need to do to ensure ample stock without going over. “Mobile computers, connected to the warehouse management system (WMS), enable team members to complete their job from anywhere without having to return to a stationary computer, interrupting their workflow,” Panasonic points out. This is just one of many ways mobile technology supports good supply chain visibility while allowing companies to maintain their JIT approaches.
Reducing JIT-Related Risk
As companies reimagine their global supply chains and adopt the technology needed to run those networks efficiently and effectively, expect to see more of them adding mobile devices and applications to their technology stables.
Whether they’re monitoring current order lead times from their suppliers, communicating with carriers about container shortages, equipping drivers with rugged devices that support on-time deliveries, or using voice-supported pick-and-pack technology in the warehouse, companies will continue to “cut the cord” and implement more mobility that allows employees to work without wires.
The same companies can use JIT to reduce waste, improve productivity and decrease supply costs without sacrificing on customer service or infusing unnecessary risk into their global supply chains.