Just in time (JIT) manufacturing is an extremely effective way to save costs and efficiently manage your cash flow. After all, if your metal inventory arrives on an as-needed basis, you’re not paying for it to sit idle on your manufacturing floor—or dealing with the financial costs of under- or over-ordering.
Despite its advantages, however, JIT isn’t right for everyone. It takes strong inventory planning and organization to coordinate the delivery of your metal products when you need them. Fortunately, you don’t have to go it alone. Here are a few ways a reputable Service Center can help make the task a little easier.
To make JIT work, you have to trust that your material will arrive on time and in the correct quantities. That’s where a reputable Service Center can pay off.
A good Service Center should have relationships with multiple metal sources, not just one. So if one supplier is facing sourcing challenges—due to a natural disaster or interrupted supply line, for instance—another one in the network can easily pick up the slack.
If you’re thinking about making the leap to JIT, find out how many metal sources are in your supplier’s network. The greater the number, the more likely they’ll be able to maintain your JIT delivery schedule even when times get tough.
Optimal lead times
A good Service Center—one with a proven history and vast book of loyal JIT clients—should also help streamline your ordering processes.
By tracking your ordering history, for example, they can help you determine how much metal you’re currently using and what an ideal delivery schedule would look like. They can also assess whether JIT makes sense for your operation—and let you know when it doesn’t. For instance, if you only order metal sporadically, JIT may not be your best choice. Conversely, if you order consistent amounts of metal on a consistent basis, a good Service Center can most definitely help.
Cash flow optimization
Perhaps one of the greatest benefits of JIT metal delivery is that you don’t have to pay for inventory on receipt. So while you may receive a delivery on the 15th of the month, say, you don’t actually have to pay for it until your statement is due. By that time, you could have already made your product, delivered it to your customer and sent out an invoice—potentially positioning you to collect before you ever have to remit payment.
If you’ve been looking for ways to improve your cash flow management, save on storage space or better streamline your inventory processes, Samuel can help. Contact us to learn more about how our JIT service offerings can benefit you.