October 4, 2020
Case Study – Consultancy Services
This Government Department is responsible for the procurement platforms and through-life support of over 600 projects for the Ministry of…
Manufacturers are consistently looking for ways to transform their supply chain into a leaner operation by reducing costs and eliminating waste.
The usage and optimisation of inventory are always major underlying factors in deploying and operating a lean process.
Storing excess and possible obsolescent inventory on hand not only impacts cash flow but also takes up valuable warehouse space that could be more effectively utilised for other core production processes.
The business practice of storing extra inventory was a standard tactic applied by manufacturers as a “Just-In-Case” approach, to ensure they always had the necessary parts or components.
This approach proved inefficient, wasteful, and costly for manufacturers.
As supply chains became more digitally transformed, the “Just-In-Time” approach was developed, allowing for a more controlled process to organise the inventory introduced into the manufacturing process.
Typically, with a Just-In-Time solution, the logistics provider and the manufacturer’s technology systems are seamlessly integrated, creating a streamlined and transparent communication for the logistics provider to visualise the “what ” and “when ” the manufacturer requires specific parts.
Once the logistics provider receives these automated digital Kanban signals, they prepare and ship the right parts “Just-In-Time” to the manufacturer as per their requirements.
When designed, implemented, and operated correctly, a Just-In-Time solution can prove to be an effective way to transform a manufacturer’s supply chain.
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In a manufacturing environment, a Just-In-Time solution is a process that aims to reduce on-hand inventory by delivering a part or component only when it is needed on the assembly line.
The logistics provider and manufacturer synchronise real-time production data, allowing the logistics provider to see what specific components are being manufactured and what parts the logistics provider needs to provide at what time.
For example, the manufacturer will communicate that they require Part A within a designated time slot.
The logistics provider is now responsible for ensuring the right parts are delivered to the right place, at the right time.
A Just-In-Time solution aims to develop a leaner manufacturing environment by increasing efficiency, reducing inventory, and optimising space utilisation.
In a Just-In-Time environment, the customer reduces space wastage and excess inventory on their assembly line.
When a car moves along an assembly line, the manufacturer will send electronic signals to their logistics provider, informing them of the specific parts required for that model.
The logistics provider will then prepare and deliver those specific parts Just-In-Time, ensuring that they are ready to be installed when the car reaches the designated area where that part is assembled.