Just In Time Delivery

Just-in-time delivery is a way of supplying a plant, jobsite or store so materials arrive close to when they are used, instead of being stored in advance. A signal from the point of use, such as an empty bin or an electronic order, triggers the next shipment. The approach comes from the Toyota Production System and is now common in automotive, electronics, construction and retail. The main benefit is lower inventory: less warehouse space, less cash tied up in stock and less risk of parts going obsolete on the shelf. The main demand is on transportation, because with little stock on hand each delivery has to arrive inside its planned window.

Just-in-case inventory keeps extra stock on hand in case a supplier or carrier is late or demand jumps. It protects production but ties up cash, warehouse space and labor, and some stock may sit long enough to become obsolete or damaged. Just-in-time does the opposite: it holds only what the line needs for a short period and relies on frequent, reliable deliveries. Many companies use a mix, keeping a buffer of critical or hard-to-source parts while running common items on JIT. The choice comes down to how reliable supply and freight are, how costly a stoppage would be and how much stock the business can afford to carry.

A Kanban signal is the trigger that tells a supplier to send more parts. In its original form it was a card attached to a bin. When the line emptied the bin, the card went back to the supplier as an order for exactly that quantity. Today many plants use e-Kanban, where scanning a bin or reaching a set stock level sends an electronic order automatically, often through EDI. The signal links consumption to replenishment, so the plant orders what it used rather than what a forecast predicted. For freight, each signal becomes a shipment with a due time, which is why JIT suppliers and carriers work to appointment windows.

Just-in-sequence goes one step further than just-in-time. The parts arrive not only when they are needed but also in the exact order the line will use them. An automotive plant building vehicles with different seats, trims or colors might receive seat sets loaded in the same order as the vehicles coming down the line. This removes sorting at the plant, but it puts more pressure on the supplier and the carrier, because a load in the wrong order is almost as disruptive as a late one. Sequenced freight is usually loaded carefully, sealed and delivered straight to a dedicated dock close to the point of use.

OTD, or on-time delivery, measures the share of deliveries that arrived inside their agreed window. OTIF, or on time in full, also checks that each delivery had the right quantity, every item and no damage. Because OTIF has more conditions, it is always equal to or lower than OTD. For example, if 190 of 200 deliveries arrive on time, OTD is 95%, but if only 182 were also complete, OTIF is 91%. JIT plants watch OTIF closely, because a delivery that arrives on time with missing or damaged parts still leaves the line short. Both are usually tracked by supplier, by lane and by carrier.

JIT transportation is planned. It covers the regular, scheduled deliveries that feed a plant or store, booked to dock appointments and usually running on fixed lanes at normal freight rates. Expedited shipping is the response when something falls outside the plan: a late supplier, a missed truck, a quality problem or a sudden spike in demand. It uses a dedicated vehicle or a flight to move the freight faster than the standard schedule allows, and it costs more per load. The two work together. A well-run JIT supply chain relies on scheduled transportation day to day and has expedited freight ready for the days when a delivery slips.

A typical example is an automotive assembly plant that keeps only a few hours of a part, such as wiring harnesses or seats, beside the line. As the line uses them, signals go to the supplier, which ships replacements on trucks booked to arrive at set dock times throughout the day. Another example is a construction project where steel beams arrive the day before the crane crew lifts them, because the site has no room to store them. In retail, stores send sales data to a distribution center, which ships replacement stock to each store as items sell. In each case, deliveries replace what was used instead of building up a stockpile.

The biggest disadvantage is exposure to delay. With little stock on hand, one late supplier, a truck breakdown, bad weather or a border hold can stop production. JIT also handles sudden demand spikes poorly, because there is no buffer to sell from while suppliers catch up. It needs more frequent deliveries, which means more freight to book, receive and track, and it depends on accurate forecasts and reliable partners. Smaller businesses may lack the order volume to get suppliers and carriers to commit to frequent small deliveries. Companies manage these risks by keeping a buffer of critical parts, using more than one supplier and having expedited freight ready as a backup.

The 80/20 rule, also called the Pareto principle, holds that a small share of items usually accounts for most of the value or usage. In inventory, roughly a fifth of the parts often make up most of the spending or most of the movement. Companies use this to sort stock into groups, often called ABC analysis, with the high-value or high-use A items managed most tightly. For JIT, it helps decide which parts to run lean and which to buffer. High-volume parts with reliable supply are good JIT candidates, while low-volume but critical parts that are hard to source may justify keeping some safety stock on hand.

On a construction site, JIT means scheduling materials to arrive shortly before they are installed rather than stockpiling them weeks in advance. Steel, rebar, precast panels, windows and mechanical equipment are often delivered the day before or the morning of installation. This keeps crowded sites clear, reduces theft and weather damage and frees cash that would otherwise sit in materials. Deliveries are tied to the project schedule, permits, inspections and pour dates, so a change in one shifts the others. Site access also matters: many jobsites have no loading dock, which is why straight trucks with liftgates and flatbeds that unload by crane or forklift are common.