How can you avoid common risks of just-in-time inventory management?

just-in-time inventory management can be risky because it relies on suppliers delivering goods quickly. To avoid the risks, make sure that you have reliable suppliers. Also, have backup suppliers in case the primary supplier is unable to deliver the goods.

In india, Munufacturers donot involve in rate contract with supplier. They buy from place where they get mtrl in cheaper rate so problem is - How to fix specific suppliers and establish faith with them ?

JIT can be successful if you have a proper tracking tool. Plus with good inventory management. But there are risks involved, Even if you cannot do it full time. Can be partially achieved.

In order to avoid common risks of just in time inventory management, it is important to have accurate data on inventory levels and demand, as well as efficient processes for ordering and managing inventory. Additionally, it is important to have a backup plan in case of unexpected delays or disruptions in the supply chain.

It has been observed that manufacturer demand for RM fluctuates and their order qty differ for maximum product they use . Therefore they use order base procurement rather than reordering level fix on ERP.

In general, the safety stock level should be calculated using a combination of data inputs/factors, which include: * past 3 to 6 months requirement and its linear average (rolling), * average daily issuances/consumption, * supplier wise EOQ batch size, * Reorder point based on EOQ & LT. With a simple adherence to check on the trigger points calculatedfrom the above, the inventory will self sustain or be less of a problem. @ZakirN

In my experience, training staff to slow down and think before punching the buttons or letting an ERP system tell them what to do is critical to ensuring that ALL inventory strategies work effectively. Hiring critical thinkers who don't get stuck in the details yet pause long enough to think outside of the immediate moment and consider impacting factors is something that employers have let fall to the wayside. Seasonality, regional trends, national consumer economic status, weather patterns and how they impact transportation, etc. all and MORE play an important role in making JIT work. Staff must have the time to think through these issues before making decisions and be encouraged to do so.

JIT took a hard hit in 2020. That hit was felt for more than 2 years. What can manufacturers do to better prepare for long term supply chain disruptions, particularly for specialized product(s)?

With the big disruption that we have seen since beginning of the Covid-19 pandemy did show how fragile JIT is. The return of JIT as it was before will probbly not happen. What is can come is a version of JIT that is more flexible. I beleive that the time of big buyers to be tough on smaller suppliers is taking the last breath. The power has shifted to the suppliers as we have seen with the outbreak. I beleive that we are in for a bumpy ride for some time to come.

The key weakness of JIT has always been interpretation and implementation. JIT is routed in a lean methodology which believes any inventory not immediately used/sold is a waste and by eliminating rhis waste the organisation will thrive. Organisations must consider their outputs when defining "In Time" and the level of risk they are prepared to accept. Once this is understood, then all the steps in this article can be implemented to ensure inventory arrives at the right time. We must all remember that "right time" is not the same for every organisation, and therefore stock on a shelf isn't always "waste".