Don’t Be Late: Simple Lessons That Automotive JIT Inventories Offer Across Industries

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Originally developed by Toyota in the 1970s, just-in-time (JIT) inventories offer a to-the-bone way to manage leaner inventories. Far from having to pay for the storage of unlucrative and often unneeded stock, the JIT shift has certainly transformed the automotive world, a fact that’s proven especially imperative when delays elsewhere threaten to unravel supply chains in their entirety.

In the face of increasing money struggles and productivity delays across industries, the value of JIT, or at least the benefits that it brings to the table, is becoming more universally relevant than ever. While this doesn’t necessarily mean that a repeat model would be right for your business, it certainly highlights the need to reassess inventory management in light of recent challenges. Here, we’re going to help you see how by especially considering the JIT benefits that enabled a swift automotive recovery, and an estimated 7-9% market growth in 2021 alone

Benefit 1: Cost-effective production

With businesses losing vast amounts of money over the past eighteen months and facing further cost setbacks from the need for diversification into online markets etc., it’s fair to say that budgets are tight. As such, piling resources, time, and profits into the development of stock that sits in a warehouse (which you also pay for) simply isn’t viable right now. By comparison, JIT inventory management that involves working more closely with suppliers to meet real-time demand ensures only the production necessary to keep consumers happy. While you might not want to go all out with lean inventories as such, keeping stock to a minimum, and taking the time to more realistically predict demand and output using analytics, can certainly better help to preserve money when you need it the most. 

Benefit 2: Continual quality improvements
The improvements necessary to keep up with an ever-changing landscape can be difficult to implement if you’re still shifting stock that’s been in storage since last November. Leaner inventory management on an as-needed basis is therefore far more receptive to quality improvements. Toyota is certainly a great example of how to adapt, with their latest EV releases being just one in several cutting-edge adjustments seen in Toyota service repair manuals across history. While companies in other sectors may prefer to keep some stock on hand for security purposes, streamlining warehouses and focusing instead on new development could quickly prove imperative in the face of quickly-changing consumer expectations.

Benefit 3: Improved supplier relationships

By encouraging faster turnovers and responsive production for disaster preparedness, JIT inventories also improve supplier relationships. In-the-moment updates and the ability for partners to request changes at the development stage are certainly imperative for automotive supply networks that often span numerous parties and locations. Even for small scale supply networks elsewhere, a more in-the-moment, speedy delivery focus based on the work you’re doing now, rather than parts created two years ago could be transformative. 

JIT inventories aren’t for everyone, but as supply disruptions continue to wreak havoc across industries, it’s certainly plain to see that leaner inventory management offers some important lessons worth learning from.

How To Increase Your Manufacturing Profit Margins

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If you’re in the manufacturing game, then you’ll already be aware that it’s an expensive business to be in. The profit margins aren’t quite as high as you’d like them to be, and it can feel like you’re putting in a lot of effort for not that much reward. But maybe it doesn’t have to be this way. Like in every other business, it’s possible to increase your profit margins in a number of ways, and once these have all been combined, you might find that they’ve made a noticeable difference to your bottom line. Below, we take a look at a few handy changes you can make to boost your operations and ultimately earn more money.

Work Out an Efficient Routine

You can get caught into a way of doing things, which sticks just because you’re used to it. However, it’s good practice to ask yourself whether you’re working this way because it’s the best, most effective way of working…or you’re doing it because this is how its always been done. Take a look at your operations, or, if you don’t feel too informed about what you should be looking for, gave an outside expert do it. You might be making a simple mistake and not even know it!

And Update Your Equipment

Your equipment is key to your success. If you’re using old machines which take twice as long to do things as the newer machines, then it doesn’t take a rocket science to see that this isn’t good for business! Keep your equipment well-serviced, and then, when it’s obvious they’re beginning to break down, replace them altogether. Also, have a think about the useful equipment that you don’t currently possess. Things like cost-effective roller conveyor systems can make the whole factory process much smoother and save a lot of time, for example. If you have the best equipment, you’ll find it easier to work efficiently. Simple!

Work With Your Employees

You’re just pulling the strings. It’s the workers on the shop floor who are doing the work. So work with them, first by making sure that they have all the training and support they need to do their job well. Second, by asking for feedback. What do they think slows down their work? What do they need to work at their best? Ultimately, if your employees can work well, then your company will benefit.

Negotiate With Suppliers

You’re not going to be working alone at your factory. You’ll have supplies and partners that you work with. But are you getting the best deal possible from them? It’s not always wise to stay loyal to companies you work with! Don’t be afraid to walk away if you’re not getting the best deal from them!

Crunch Them Numbers

And finally, go over those numbers, again and again. It’s nearly always possible to save money without compromising the quality of your work or the happiness of your workers. Have an eagle eye, and make small savings wherever you can.