General Description
JIC Is a version of JIT that is more ready for possibilities.
In addition to JIT, it aims to reduce the risk of being out of stock by keeping more stocks on certain products.
All businesses, especially manufacturers, who dedicate a significant part of their capital and physical areas to stock keeping, have achieved considerable cost advantages thanks to JIT led by Toyota.
These advantages, which last for years, are about to be replaced because,
- 2020 Covid-19,
- 2021 Evergreen event,
- 2022 Russia-Ukraine War,
- 2023 Possibility of Chinese invasion of Taiwan,
by a kind of hybrid solution. The emerging understanding here is JIC.
JIC is not a substitute for JIT, but rather represents a gray area between Push and Pull, which is integrated into it.
We can also think of it like this;
- ProActive instead of ReActive
- Flexibility over Efficiency
Of course, just like in JIT, Supply Chain Visibility is critical here. If there is a deficiency in this regard, JIC can cover this problem with increased inventory, but it will also make the return to JIT more expensive.
However, applying JIC to specific product groups may be possible rather than to all products. In this way, additional costs will be reduced to some extent.
To be successful in JIC, studies should be done on the following topics;
- Researching alternatives
- Incorporation of new suppliers into the system instead of Off-Shore, on the same continent and, if possible, in closer geography where political and political problems will not occur)
- Reducing the number of suppliers in places where natural disasters occur frequently
- Keeping potential problem areas under constant observation
- Creating the infrastructure that can react quickly when possibilities or sudden problems occur
- To increase the Minimum Stock Levels (ReOrder Point) within the framework of specific analyses
- To be sensitive not only to market dynamics, but also to political dynamics and public health issues.
- Making the ERP System compatible with the JIT / JIC system on a product basis
Advantages;
- Gaining an asymmetric advantage in the market as a result of faster response to sudden supply problems
- Reducing the financial losses at this point by reducing the out-of-stock ratios
Disadvantages;
- Relatively higher inventory costs compared to JIT
- Increased opportunity cost as financing is tied to stocks
- Possibility of holding unused stock
In summary...
Especially in recent years when maps and units are trying to be updated, JIC must be evaluated.
As in the case of The Broken Supply Chain of Ericsson, while the painful examples of what supply shortages cause are still in our memory and the problems that may be caused by chip production in Thailand in the coming years remain fresh, it is evident that it is essential to address this issue.
Recently, major manufacturers, especially Ford and GM, have started implementing the JIC approach in their offshore products.
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