Common Mistakes and Risk Management in Just in Time Delivery

Just in Time Delivery offers compelling benefits—lower inventory, reduced waste, and improved cash flow—but it also raises exposure to disruptions. For beginners adopting JIT, understanding common mistakes and how to manage risk will make the approach viable and resilient. This article covers the pitfalls to avoid and practical mitigation strategies to protect service levels.

Common mistake 1: Overreliance on a single supplier

One of the most frequent errors is depending on a single supplier without contingency plans. If that supplier has a machine breakdown, labor strike, or transportation issue, your entire flow can stop. Mitigation: diversify suppliers where feasible, maintain secondary sources for critical components, and develop strong collaborative relationships so you can escalate and resolve issues quickly.

Common mistake 2: Ignoring lead time variability

JIT assumes predictable lead times. When variability is high—due to congestion, weather, or customs delays—JIT without buffers leads to stockouts. Mitigation: measure lead time variability, adjust delivery windows, and use dynamic safety stock calculations that account for variability rather than fixed, small buffers.

Common mistake 3: Poor demand forecasting and signal sharing

JIT depends on timely, accurate demand signals. Relying only on historical averages or siloed forecasts can miss spikes or sudden drops. Mitigation: implement systems that share point-of-sale or confirmed order data with suppliers, use short-term predictive analytics for near-term demand, and align promotion calendars across partners.

Common mistake 4: Underinvesting in visibility and technology

Manual processes can’t sustain the cadence JIT requires. Without real-time inventory and shipment visibility, coordination breaks down. Mitigation: invest in WMS/TMS integrations, use cloud-based dashboards, and enable EDI or API connections to automate order confirmations and shipment tracking.

Common mistake 5: Neglecting transportation risk

Frequent, small shipments increase dependence on transportation networks. Unexpected carrier shortages, port congestion, or regulatory changes can disrupt flows. Mitigation: build multiple transport options (local carriers, scheduled express lanes), include contingency freight agreements in contracts, and use carriers with robust tracking and service guarantees.

Risk management strategies

• Multi-sourcing: Maintain alternate suppliers and spread orders to reduce single points of failure.
• Strategic buffer stock: For critical or high-variability items, keep a small safety stock or ‘decoupling inventory’ at strategic nodes.
• Service-level tiering: Classify SKUs by criticality and apply JIT only to those with stable demand or low risk. Use higher buffers for mission-critical items.
• Contracts and SLAs: Negotiate service level agreements with suppliers and carriers that include lead-time commitments, performance metrics, and clear remedies for failures.
• Scenario planning and drills: Run disruption simulations to test your response plans—alternate suppliers, expedited freight, or temporary warehousing.

Regulatory and compliance risks

For international shipments, customs delays and compliance issues can upend JIT schedules. Ensure import documentation, duties, and certifications are handled proactively. Work with experienced freight forwarders and customs brokers who can provide advance rulings and fast-track options where available.

Technology and data hygiene

Accurate data is the backbone of JIT. Incorrect stock counts, mismatched SKUs, or delays in sales data will produce wrong order triggers. Maintain disciplined inventory counting processes (cycle counts), reconcile discrepancies quickly, and ensure system integrations are monitored and tested. Cloud platforms often provide alerts for data mismatches and can help maintain a single source of truth.

When to avoid strict JIT

There are scenarios where strict Just in Time Delivery is too risky: global supply chains with long uncontrollable lead times, items subject to frequent regulatory inspections, or products with high variability in demand. In such cases, hybrid strategies—combining JIT for some SKUs and safety-stock-driven replenishment for others—are prudent.

Real-world mitigation example

A medical device manufacturer adopted JIT for non-critical components but maintained safety stock for parts that could delay production if unavailable. They established two alternate suppliers, added contractual lead-time penalties, and invested in a TMS to monitor inbound shipments. When one supplier faced a temporary shutdown, the manufacturer switched to alternates without interrupting production—showing how layered risk management preserves the benefits of JIT while reducing vulnerability.

Summary and checklist

To reduce risk when using Just in Time Delivery, follow this checklist:

1. Classify SKUs by criticality and demand stability.
2. Validate supplier reliability and diversify where practical.
3. Measure and manage lead time variability.
4. Invest in visibility tools and keep data accurate.
5. Negotiate SLAs with suppliers and carriers.
6. Maintain contingency plans and run disruption drills.

By understanding the common mistakes and applying practical risk controls, beginners can harness the efficiency of Just in Time Delivery without exposing their operations to undue disruption. The aim is to balance lean inventory benefits with pragmatic safeguards so the supply chain remains both efficient and resilient.