What does just-in-time mean?
In logistics, a delivery is referred to as just-in-time if it arrives at the customer at the exact moment it is needed. This should make the value creation process much leaner. This process is used in particular in mass and large-scale production, such as in the automotive industry. Some car manufacturers even locate the production facilities of component suppliers directly on the premises of the manufacturing plant in order to be able to react immediately.
Companies that operate according to the just-in-time strategy coordinate the entire material flow with the production process. This reduces throughput times in production and storage costs can be kept low. This is because the materials only have to be delivered once the customer has placed the order. This process allows the supplier's manufacturing process to be seamlessly linked with the customer's production process.
The prerequisites for just-in-time are
- Good infrastructure
- Optimized information flow
- Special design of contracts such as framework agreements
- Flexibility of the supplier
- Optimization of the organization
- Orders with large quantities
