In the 1970s, executives at Japanese car manufacturer Toyota decided that the company could adapt more efficiently to changing trends and demands if they got rid of surplus inventory. Instead, they would only keep as much inventory as they needed.
Toyota’s innovative idea is what we call Just-in-Time delivery. Just-in-Time (JIT) delivery is great for small businesses and large corporations because it improves cash flow and reduces the amount of capital you need to keep handy.
Let’s look at a few more ways JIT can help you save costs and boost your business:
Due to rapidly changing trends and demands, you may feel the need to modify a product or move from one type of service to another. JIT delivery gives you the flexibility to change products without worrying about excess inventory.
Managing storage is more convenient with JIT. For example, if you place an order with the manufacturer by telling them exactly how much inventory you need, the manufacturer will only send you that much. This helps you reduce inventory turnover days and the cost of storing the inventory in your warehouse.
If an order is cancelled or unfulfilled, manufacturers are usually left with unwanted inventory that is left unclaimed. With JIT, orders are received as and when they’re needed, so there’s no risk of unwanted inventory lying around.
For example, Toyota and other car manufacturers usually operate low inventory levels. However, they’re dependent on their supply chains to deliver car parts when needed. JIT enables the car manufacturer to order the specific parts needed to build a car after a customer has placed their order, helping save costs.
The benefits of Just-in-Time delivery are quite evident. However, to run an efficient JIT delivery system, you need a lot of planning and coordination and an accurate tracking system.
Additionally, if you plan to offer JIT delivery, you need to have a reliable delivery system to deliver the product from your warehouse to your customers. Drive Yello is the perfect delivery partner to help you reap the benefits of Just-in-Time delivery and avoid the hassle of the last mile!