Common Mistakes and Best Practices for Just-in-Time (JIT)

Just-in-Time (JIT) is attractive because it reduces waste and inventory costs, but the approach also introduces vulnerability to disruptions. Understanding common mistakes and adopting proven best practices helps organizations implement JIT successfully while managing risk. This article outlines frequent pitfalls, practical fixes, and a checklist of best practices for beginners.

Common mistakes

• Overly aggressive inventory reduction: Cutting buffers too far, too fast is a frequent error. Without sufficient supplier reliability and process stability, service levels suffer and stockouts increase.
• Ignoring supplier variability: Treating all suppliers as equally reliable leads to unexpected delays. Suppliers may have their own capacity, quality, or transport constraints that must be understood.
• Poor data quality and demand signals: JIT depends on accurate, timely information. Stale or incorrect inventory and sales data results in missed replenishments or excess orders.
• Underestimating lead-time variability: Not accounting for fluctuations in transport or production lead times can break the JIT flow.
• One-size-fits-all JIT: Applying JIT uniformly across all products without segmenting SKUs by demand characteristics leads to poor outcomes; slow-moving or highly variable items may need different strategies.
• Insufficient contingency planning: Failing to plan for supplier failures, transport disruptions, or sudden demand spikes leaves operations exposed when things go wrong.
• Lack of cross-functional buy-in: JIT impacts purchasing, operations, logistics, and sales; insufficient collaboration causes misaligned priorities and inconsistent execution.

Best practices to avoid these mistakes

• Start with segmentation: Classify SKUs by demand stability, value, and criticality. Use JIT for fast-moving, predictable items; keep safety stock or use alternative replenishment for critical or variable items.
• Choose reliable suppliers and collaborate: Develop close relationships, share forecasts, and create joint improvement programs. Consider supplier development where strategic suppliers need capability upgrades.
• Use data and technology: Implement or integrate WMS, ERP, and demand planning tools to provide timely, accurate signals. Real-time inventory visibility and automated reorder triggers reduce human error.
• Design layered buffering: Instead of zero inventory everywhere, maintain small, strategic buffers for critical components and use tiered safety stock logic based on risk.
• Implement pull systems and visual management: Kanban, electronic pull signals, and simple visual cues make replenishment intuitive and reduce errors on the warehouse floor.
• Plan for disruptions: Identify alternative suppliers, pre-agree emergency shipment terms, and maintain contingency stock for the most critical items. Run scenario exercises to test response plans.
• Train and empower teams: Cross-train employees so you can reassign resources during spikes or disruptions. Empower staff to halt production for quality issues and trigger immediate corrective actions.
• Monitor the right KPIs: Track stockouts, on-time supplier deliveries, lead-time variation, inventory turns, and order fulfillment rates to surface problems early.
• Continuous improvement culture: Use root cause analysis and Kaizen events to resolve recurring issues. Small, regular improvements create a more robust JIT system over time.

Practical checklist for beginners

1. Segment SKUs and select initial JIT candidates.
2. Audit supplier reliability and negotiate delivery frequency.
3. Ensure accurate, real-time inventory and demand data in your systems.
4. Implement visual pull signals (kanban cards, shelf labels, or electronic alerts).
5. Set modest safety stock while processes stabilize.
6. Cross-train staff and document contingency plans.
7. Measure KPIs and run regular improvement cycles.

Example of a costly mistake

A manufacturer that shifted to JIT without verifying a key supplier’s transport reliability experienced a prolonged supplier shutdown. Because the manufacturer had minimal safety stock, production stopped for days. The lesson: supplier capability and contingency planning are non-negotiable.

JIT example

A regional distributor implemented JIT for its fast-moving SKUs but maintained a small emergency buffer for critical items and partnered with two local carriers. When a primary carrier experienced delays during peak season, the distributor smoothly shifted shipments to the alternate carrier and avoided stockouts.

In summary, Just-in-Time (JIT) can dramatically cut waste and inventory costs, but the approach must be applied thoughtfully. Avoid razor-thin buffers until your supplier base, processes, and data systems are proven. Use segmentation, strong supplier collaboration, technology, layered buffers, and a culture of continuous improvement to build a JIT system that is both lean and resilient. For beginners, the safest path is a measured rollout with clear metrics and contingency plans.