Just In Time Delivery Definition: How Does It Impact Last Mile Delivery?

"Just in time" versus "just in case" feels like a tale as old as time as far the supply chain is concerned. In fact, the debate is only about 50 years old at this point. What began as a waste reduction method at Toyota in the era where Japanese car manufacturers were striving to compete with the American auto industry has really taken on a life of its own. So much so, in fact, that “just in time” is probably one of the only supply chain concepts that have entered daily parlance outside the logistics industry.

The extent to which just in time (or JIT) is in broad use ebbs and flows over time. A Forbes article from a few years tracked the increase in just in case ordering among manufacturers and retailers who were trying to get ahead of potential parts shortages and supply chain disruptions—which of course has its own pitfalls as a strategy. Similar pieces are published regularly as the debate rages on. 

All of which begs the question: how is just in time delivery as a concept impacting the modern logistics industry (particularly with regards to last mile delivery), and how can delivery organizations grapple with it most effectively in the current supply chain climate? 

What Is Just In Time Delivery?

What is just in time delivery? At the simplest level, it’s an inventory management strategy that’s designed to minimize waste by stocking only the items that you’re about to use, either in the manufacturing process or the fulfillment process. Rather than having a warehouse full of widgets so you always have them on hand for whatever requires those widgets, you work backwards from your actual production plan to mete out deliveries of the widgets based on the rate at which you’re actually planning to use them.  

The “just in time” part of the equation means that the onus is on the supplier not to deliver the widgets too early. If you’re reading this blog and you’re a delivery business rather than a manufacturer or producer (which, given that it’s a blog about last mile logistics, seems fairly plausible), you might in a position where short lead times are the norm and delivering early is just as bad as delivering late from the client’s perspective. 

JIT Delivery Pros and Cons

For manufacturers and retailers, JIT tactics enable reduced inventory footprints, which means reduced warehousing costs. This is the most straightforward way that just in time delivery can save money, but there are a handful of other benefits as well:

• Reduced over-ordering of parts above and beyond actual production or fulfillment demand
• Defects in either parts or processes can be dealt with more easily if there are fewer problematic widgets on hand 
• Reduced need for workers and floor space devoted to managing excess inventory 

At the same time, there are disadvantages to just in time that businesses need to find ways of overcoming:

• Just in time supply chains are more susceptible to stockouts and product shortages, since even a small delay on the supplier’s end can bring the entire operation to a halt
• Effective just in time workflows depend on being able to forecast demand effectively, which is often quite difficult in practice and can lead to extremely slow fulfillment times
• To effectively utilize a leaner inventory, businesses need to achieve much higher standards for visibility and transparency across the supply chain
• Just in time often encourages single sourcing of parts, which can leave you more vulnerable to supply chain disruptions. 

At the end of the day, just in time is cheaper but riskier—which means that it makes more or less sense depending on a range of factors: demand forecasts, interest rates, the general state of the global supply chain, and many others. 

How to Accommodate Just In Time Deliveries

If you’re a supplier or a 3PL for a business that’s running just in time deliveries are part of their supply chain strategy—or even if you’re just the internal stakeholder who has to deal with the first, middle, or last mile (rather than the manufacturing process), ensuring deliveries that are at precisely the right time can be daunting. 

Luckily, there are tools and frameworks you can implement within your delivery strategy to accommodate clients, customers, or internal stakeholders who have just in time delivery needs:

• Prioritize systems integration: The first thing you need is the visibility to see where all of the relevant parts are in the world, where your trucks are, what your capacity is, and how long it will take you to fulfill any given order. This means leveraging tools and technologies for delivery management to integrate easily with the systems in use by your other teams.  
• Optimize your routes with AI: When you need to show up at precisely the right time, you need to have total confidence in your delivery ETAs—and there’s really no way to make that happen by hand. That’s why it’s increasingly a best practice to leverage an AI-powered route optimization tool that can turn a complex tangle of parameters and customer requests into reliable ETAs and efficient routes. 
• Provide visibility to your customers: This applies to both internal and external customers—and, frankly, it applies to the stakeholders on your own teams as well. Information goes out of date quickly in the supply chain, and the ability to provide up-to-the-minute ETAs and live tracking for goods in transit can go a long way towards helping your customers coordinate their schedules with incoming shipments.  
• Shorten your delivery lead times: Getting just in time deliveries right isn’t just about the ability to show up at a precise time—it’s also about being able to deliver quickly enough that when demand materializes the rest of the logistics chain can spring into action without too much delay. Luckily, this is another area where visibility and route optimization go an incredibly long way. AI-powered routing can enable you to generate delivery routes in less than half the time (often significantly less) than it would take with a legacy solution, which means your order cutoff can be much later in the day. By the same token, improved visibility means that you always know what your available delivery capacity is going to be, and you can get the most out of it on a consistent basis. 

If you can make all of this happen, you can put yourself in a position to provide just in time deliveries to your customers or clients (internal or external). It might sound like a daunting set of best practices, but the good news is that each one feeds into the other to provide you with increased connectivity and efficiency across the board. 

Just in Time Delivery with the Right Technology

Just in time delivery can be a valuable tool for manufacturers and other businesses—but it puts huge amounts of pressure on the ones actually carrying out the deliveries. On time performance is never a given in the last mile (or the middle mile, or the first mile), so slotting delivery operations into the just in time framework effectively is no mean feat. 

Luckily, the right last mile delivery technology can go a long way towards helping you deliver at the right time. To learn more about what that could look like in practice, don’t hesitate to reach out to one of our experts to learn more.