Advantages, Disadvantages, and Risks of JIT Supply Management

This report provides a detailed analysis of Just-In-Time (JIT) supply management, outlining its various advantages, disadvantages, and associated risks. The advantages discussed include reduced space requirements, waste reduction, prevention of over-production, decreased defects, minimized transport costs, and reduced capital tied in stock, leading to cost savings and improved quality. The report also highlights the benefits of a smooth production flow, reduction in waiting time, and stronger relationships between employees and vendors. However, the report also identifies several risks, such as the potential for stock shortages, the need for more planning, and a lack of flexibility. Other risks include supply shocks, demand shocks, and the impact of natural disasters. The report concludes by emphasizing the complexity of JIT and the importance of overcoming challenges such as forecasting. References from various studies are provided to support the analysis.

JIT SUPPLY
MANAGEMENT

ADVANTAGES
Manufacturing facilities uses Just In Time (JIT) approach
for increasing efficiency as well as decrease waste by
receiving products only as required for production process.
Advantages of JIT supply management are as follows:
Reduced space required
Smaller investments
Waste reduction/elimination

ADVANTAGES (CONTINUED)
Prevention of over-production
Decreasing defects of products
Minimizing transport costs
Reducing capital tied in stock
Saving resources through streamlining production
systems
Minimizing the waiting times
Dispensing with need of inventory operations

ADVANTAGES (CONTINUED)
Smooth flow of production
Reduction in waiting time and storage
Pull method
Employee satisfaction
Equipment maintenance
Stronger relationships of employees
Reliable vendors
Automated purchasing

ADVANTAGES (CONTINUED)
Cost Savings
Improve quality of goods
Increase emphasis of close coordination among firms and
suppliers
Production scheduling
Efficiency in skills of employee
Reduction of setup times

ADVANTAGES (CONTINUED)
Reduced costs of warehousing
Better satisfaction of customers
Decreased waste
Improvement in supply chain management
Minimum inventory
Detection of production mistakes

RISKS
While several advantages are there of JIT supply
management, there are few drawbacks also. The
disadvantages of JIT supply management are as follows:
Risk of shortage of stock
Need of more planning
Shortage of control over time frame

RISKS (CONTINUED)
JIT supply management means that items are not produced
by businesses for sale unless they are ordered by customers,
which means inventory is nonexistent or low. Few more of
the risks of JIT supply management are as follows:
Supply shocks
Large orders
Demand shocks

RISKS (CONTINUED)
Unexpected and sudden drop within business could mean
too much ingredients on shelves. It sets up problem as the
system would be expecting drop of business again.
One of biggest risk of JIT supply management is lack
of flexibility. With JIT supply management, overall process
of inventory is much more complex. Effects of natural
disaster could have huge impact over any business with JIT
supply management.

RISKS (CONTINUED)
Businesses are opened by JIT supply management to several
risks that are associated with supply chain. JIT supply
management’s successful execution is not easy task. One of
most tough risks is overcoming while using JIT supply
management is forecasting.
JIT supply management could be quite sensitive for
any type of error. JIT supply management would not be able
in adapting to sudden increment in demand of market.

REFERENCES
Bond, P. L., Green Jr, K. W., & Inman, R. A. (2019). Relationships among JIT practices: an
interpretive modeling approach. Production Planning & Control, 1-12.
Chung, W., Talluri, S., & Kovács, G. (2018). Investigating the effects of lead-time uncertainties
and safety stocks on logistical performance in a border-crossing JIT supply chain. Computers &
Industrial Engineering, 118, 440-450.
Kong, L., Li, H., Luo, H., Ding, L., & Zhang, X. (2018). Sustainable performance of just-in-time
(JIT) management in time-dependent batch delivery scheduling of precast construction. Journal of
cleaner production, 193, 684-701.
Kumar, B., & Kumari, A. (2017). An Analysis and Mathematical Model of Just in Time (JIT) Supply
Chain Management.
Marhamati, A., Taheri, M., & Hesamzadeh, M. (2017). Effect of Supply Chain Management
Strategy on Company Performance with mediating Role T-JIT. Journal of Administrative
Management, Education and Training, 13(1), 10-21.
Myerson, P. (2018). Lean demand-driven procurement: how to apply lean thinking to your supply
management processes. CRC Press.
Phan, A. C., Nguyen, H. T., Nguyen, H. A., & Matsui, Y. (2019). Effect of total quality management
practices and JIT production practices on flexibility performance: Empirical evidence from
international manufacturing plants. Sustainability, 11(11), 3093.
Razmi, J., Aslani, A., & Amin, S. H. (2018). A surcharge pricing scheme for coordinating the
supply chain of deteriorating products under the JIT environment. International Journal of
Business Performance and Supply Chain Modelling, 10(2), 146-164.

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