62.7% of Canadian businesses say supply chain challenges worsened during the third quarter of 2024, while almost 48% say they remained about the same, Statistics Canada reveals. For SME owners who want to optimise their supply chain and avoid disruptions, Just-In-Time (JIT) can be an effective inventory management strategy. JIT involves minimising your on-hand inventory, so you don’t overstock and have just enough to fulfil orders as they’re received. This reduces costs associated with excess stock, storage fees, and unwanted inventory (such as in the case of cancelled orders, for example). As long as you make an effort to monitor your inventory, find reliable suppliers, and improve turnaround time, you can implement this strategy successfully.
Monitor your inventory
All successful JIT systems monitor inventory stringently. You need to know you have enough stock on-hand to fulfil current orders and schedule replacement deliveries exactly when needed. Fortunately, budget-friendly inventory software can alert you to low-stock, so you can replenish supplies before you run out completely. In fact, most SMEs now use stock-keeping units (SKUs) to monitor stock. SKUs are unique barcodes assigned to each of your products. This makes it easier to see how much stock you have at a glance, prevent stockouts, and fulfil orders efficiently.
Find reliable suppliers
JIT can only work if you partner with reliable suppliers who can deliver stock as and when you need it — otherwise your whole system will be destined to fail. So, if your current suppliers are slow or inconsistent with deliveries, look around for new providers who can meet your tight schedule. Before you choose a supplier, pay particular attention to their stock levels and lead times. You need to be confident they can fulfil orders fast without lengthy hold-ups as they source materials or complete manufacturing, for instance.
You may also want to consider a partnership with a third-party logistics (3PL) company who deals with JIT suppliers on your behalf. This frees you up to focus on other areas of your SME, while you also benefit from the expertise and resources of a professional 3PL provider. This can be a particularly good move if you deal with food or pharmaceutics that require cold storage. Cold chain storage adds an extra layer of complexity to logistics as goods need to be maintained at specific temperatures that meet regulatory compliance. For instance, refrigerator coldhouses need to be kept at 4°C degrees or lower, whereas frozen storehouses should be -18°C degrees or lower to maintain food safety. Fortunately, 3PL providers experienced in cold chain logistics use technology to track and adjust temperatures in real-time, which ultimately optimises your cold storage operations.
Improve turn around time
Fast turnaround is a must for customer satisfaction — in fact, 66% of customers consider speed to be just as important as price. So, assess your current fulfilment systems and see where you can make improvements to get orders out the door fast when you have minimal inventory. For example, you may need to optimise your warehouse layout in order to speed up your pick and pack process. This can involve the categorization and storage of inventory based on how often it’s in demand. High-demand items should be stored right next to packing stations, whereas low-demand items can be stored further away. Pickers therefore don’t have to travel as far for high-demand items, which speeds up the fulfilment process.
JIT can help you cut costs and improve speed and efficiency — as long as you implement it correctly. So, take care to accurately monitor your inventory, find reliable suppliers, and improve turnaround time, and you’ll make a success of this strategy.