What is Just in Case?
- Just in case, also called JIC, is a production strategy employed by larger firms producing more complex products. It is the alternative to JIT.
- It refers to the situation where a company keeps a small stock of components or products or ones that take a long time to make, just in case of a rush order.
Advantages
- Distribution: no delay as parts are available.
- Reliability: part is ready to be sent and probably has passed quality control.
- Market demand: manufacturer is able to keep up with a change in market demand.
Disadvantages
- Efficiency: not as efficient as it is organized in departments often offsite.
- Capital investment: high, but machinery could be used for a variety of products.
- Storage: space required thus increasing costs.
- Waste: some waste due to overproduction, left over stock, product defects and material processing.
- Stock control: may result in leftover stock when the product becomes obsolete or market direction changes.
What is Just in Time?
- Just in time, shortened to JIT, is a production strategy generally employed by smaller firms, whose products can be quickly produced.
- It is a situation where a company does not allocate space to the storage of components or completed items, but instead orders or manufactures them when required.
- Large storage areas are not needed and items that are not ordered by customers are not made.
Advantages
- Storage: no space required thus reducing costs.
- Efficiency: highly flexible, easy set-up for short runs (because of cell production).
- Stock control: none required also no leftover stock when the product becomes obsolete.
- Waste: elimination of waste due to overproduction, leftover stock, product defects and material processing.
Disadvantages
- Reliability: part will need to be made, things could go wrong, delay in manufacture and transport to consumer.
- Capital investment: high but machinery could be used for a variety of products.
- Distribution: small delay as consumer waits for the manufacture and distribution.
Deciding between JIT or JIC
- JIT and JIC are two opposing production strategies used by manufacturers that have both advantages and disadvantages to them.
- A manufacturing company will choose one of these strategies to follow for many reasons that include the products they are producing, the nature of the market and the nature of the economy.
- While inventory creates a safety net for companies, maintenance and potential waste of resources can have significant implications for companies and the environment.
- Manufacturers must evaluate and analyze each market and determine whether a JIT or JIC strategy is the best to follow.