10.1 JIT and JIC

• Just in Time (JIT) and Just in Case (JIC) are strategies for managing production. Specifically, they are focused on managing the raw materials and parts needed for production and the inventory, with the goal of reducing storage costs and ensuring there is always enough inventory to meet customer demand.
• Just In Case (Push to the market)


  In JIC, manufacturers focus on creating products in anticipation of market demand. Their goal is to reduce costs by taking advantage of economies of scale.

  The stock of components or products are stored as inventory. For products that take a long time to produce, having an inventory on hand reduces the waiting time for customers.
• JIC advantages

  • Timely distribution of parts is always available.
  • Higher reliability as parts in inventory are ready to be sent 
  • Buffer of items in stock in case there is a production delay, quality control issue, or sudden increase in demand
  • Ability to respond to market demand as the manufacturer can always meet need.
  • Lower capital cost as less dependency on complex ICT systems (compared to JIT)
• JIC disadvantages

  • Large inventory must be managed
  • Higher capital costs for space to store inventory
  • Higher wastage due to spoilage (products going bad or expiring such as food or some chemicals)
  •  Risk of changing market demand could mean the manufacturer is left with large quantities of unsalable goods.
• Just In Time (Market Pull)


  In JIT, manufacturers respond to market needs as the need arises. In this model, goods are made to order when requested. 

  A JIT system does not carry a large inventory of goods or raw materials; Rather it depends on a network of suppliers and distributors to move raw materials in and products out of the factory. Such a system depends a great deal on IT to coordinate communication between all the parties.
• JIT advantages

  • Highly flexible manufacturing ideal for short runs
  • Low waste as there is no over-production, little idle time, and material uses is optimized
  • Lower costs as there is little to no inventory to manage - raw materials are used almost immediately and products are shipped very soon after manufacture.
• JIT disadvantages

  • Greater risk of manufacturing delays: production problems and quality control issues in one area can delay the whole system;
  • Delay between ordering and delivery: Customer must wait longer (compared to JIC) to receive item
  • Manufacturers cannot benefit from economies of scale to the same degree because they purchase smaller quantities of raw materials.