The Benefits of Just In Time (JIT) Inventory for Growing Brands

August 29, 2019

BLOG POST

Way back in 1986, the Harvard Business Review was singing the praises of Just In Time (JIT) inventory, a then-new strategy based on the success of Japanese manufacturing. Since then, the supply chain has evolved in countless ways, transforming how businesses view the nuances of production and inventory management. Yet that Harvard Business Review article’s headline is just as relevant today as in the mid-1980s: What’s Your Excuse For Not Using JIT?

Paleonola Case Study:  packaging & inventory

Estimates show U.S. retailers are currently sitting on $1.43 in inventory for every $1 of sales. In an increasingly global marketplace where the fight for space on the shelf—both digital and physical—has never been more competitive, JIT programs are a proven way to streamline inventory costs and drive growth.

If your brand isn’t yet using JIT inventory, now is the time to make the switch.

What is a JIT program?

JIT programs are designed for customers who want to maximize their use of available floor space and cash flow. Under these programs, a trusted partner holds your inventory, manages it and sends just the amount that’s needed exactly when it’s needed, often over a 60-day period. Given the complexity of forecasting and managing your order flows and volumes—and the tendency for cash flow to get tied up in your inventory—these programs are being adopted by more brands than ever. 

JIT programs are even more effective when managed by a full-service packaging and fulfillment partner. By choosing a single partner to handle all your brand’s packaging and inventory, you can streamline the entire supply chain—and uncover areas for cost savings every step of the way. 

JIT programs are closely related to Vendor Managed Inventory (VMI) programs. Learn more about the power of VMI programs.

More cash flow. Less inventory piling up in your facility. The confidence that your inventory will arrive when it’s needed in the exact amount your business requires. This all sounds like a no brainer, but what does using a JIT program actually do for your business? Here’s a quick case study to illustrate the benefits.

The Brand: Paleonola, a small but growing grain-free granola brand 

The Challenge: The brand’s inventory needs fluctuate on a monthly basis, with unexpected growth spurts directly impacting its order volumes. Its previous supplier often required lead times of 10 to 12 weeks, making it difficult to accurately forecast the company’s true inventory needs. It also tied up substantial operating cash that would otherwise be used to pay for equipment. 

The Results: By leveraging JIT, Paleonola can order the amount of inventory needed based on real-time sales forecasts. This frees its cash flow, opens up crucial floor space in its facility, enhances lead times and streamlines its ordering process. 

Read the full Paleonola case study

At Victory Packaging, our JIT program is expertly designed to take the time-consuming task of fulfillment off our customers’ plates. With our program, we hold a client’s inventory and deliver it as needed over a 90-day period, guaranteeing you get the exact amount of inventory required. 

Less cash flow tied up in surplus inventory. Fewer headaches. More time to do what you do best. Contact our Architects of Packaging Solutions to see how our JIT and Vendor Managed Inventory (VMI) programs can help your brand succeed. 

Topics: e-commerce packaging, fulfillment, packaging solutions, supply chain cost management, 3pl solutions, sustainability, packaging trends