Just In Time Inventory

Are you familiar with JIT, the Just In Time concept? Basically it’s an inventory system. Many plants use Just In Time (JIT) so they don’t have storage real estate expenses, or carrying costs on inventory, or manufacturing expenses due to over producing parts they don’t need, or inactivity costs when shut down due to inavailable parts to complete a manufacturing process or sale.

Just In Time

By acquiring materials, parts, or products just in time, their inventory is made or ordered according to schedule so that it will arrive just in time to run production, or sell an item. Many companies are following this business manufacturing model, and it is saving some companies from going out of business in this recession by freeing up money that they used to have tied up with a lot Inventory, and even waste due to over procurement.

Just In Time Inventory System

It is a system of timing. If parts are not self-made, the buyer has to buy just what will be needed. Buying is not just the paying, but the finding, pricing, negotiating as well. It’s all part of procurement, and as it’s been established, if the stuff is not procured, the making or selling will not be happening. If properly bought, the owness is on the shipper to ship what’s been ordered to the receiver just in time.

JIT Versus Overstocking
Rather than ordering or making a lot of one or many certain part(s), a company can save money and storage space by procuring or manufacturing the part(s) only when needed in the current production or sales process. If procurement only occurs when needed, you know that it is in fact needed, but if ordering in advance, you have to predict necessary quantities and may end up with too much or too little. JIT reduces the risk of overstocking down to almost zero, thus handling problems such as shelf-life expirations, or wasted non-perishables that will never be used.

JIT Versus Understocking
The Just In Time model also pretty much takes care of understocking problems. If a purchaser hasn’t purchased enough, or you attempt to purchase what’s needed too late, you’ll miss the Just In Time schedule. When the time comes to use the missing piece of your puzzle, and it has not yet been shipped or received, the production line shuts down or an item for sale is not available.

Just In Time Buying

Procurement in a JIT environment requires purchasing, shipping, and receiving to be an organized, streamlined process. Availability of parts is a matter of timing. In a manufacturing plant that uses Just In Time procurement, unavailable parts or materials will shut down a production line. If there’s no other steps that can be done ahead of schedule, independent of the missing material, the plant is closed for the day(s) until missing parts are bought, shipped, and received.

JIT Manufacturing

For those who make their own parts, but do it only when needed, there is a bit more control over the process, because it is all internal and all factions hopefully share the same desire and same goal – to get the job done well, and on time. Although manufacturing facilities may be in different places than warehouses, they are at least part of the same company. Shipping/receiving can lead to scheduling problems.

Just In Time Shipping/Receiving

For this to work, manufacturing, shipping, receiving, and sales departments have to be on the same page. When buying from outside your own company, beware of untrustworthy shipping companies. If it’s not shipped, it won’t be received in time to be built in to your product, or sold.

JIT Warehousing

Considering potential shipping problems, it might be better to have warehouses close to the destination where the product will be assembled, manufactured, or sold.

All in all, inventories can be managed better with JIT.

Container Technology International
For industrial container, IBC, tote tanks, steel drum, and marine parts, Contech has many warehouses throughout the US, and has the inventory available for our customers’ next-day or same-day delivery.

Currently at our Gretna, LA warehouse, we stock:

  • Steel discs
  • Capseals
  • Nylon plugs
  • Nuts
  • Lugs
  • Gaskets
  • Paint caps
  • Ball valves for IBCs
  • Other IBC parts & components
  • IBC lid gaskets
  • Plastic IBC valves & fittings
  • Marine Hardware
  • Steel stampings
  • Aluminum castings
  • Stainless steel fittings
  • Brass hose nipples
  • Bolted tank fittings
  • Stainless steel drum closures
  • Steel fittings for air brake tanks
  • Steel cylinder fittings
  • Crimp fittings for hose industry
  • Gears for air starters

Currently at our Baltimore, MD and our Port Wentworth, GA packaging warehouses, we stock:

  • Steel discs

Currently at our Midwest warehouse in Chicago, IL, we stock:

  • Plugs
  • flanges
  • Capseals
  • Nylon Plugs
  • Bolts
  • Nuts
  • Lugs

Currently at our Houston, TX warehouse, we stock:

  • Plugs
  • Flanges
Posted on: Posted in: Procurement