FEATURE
HAS THE 'JUST IN TIME' ECONOMY HAD ITS DAY? We live in a world where almost anything can be ordered to your front door at the touch of your fingertips and delivered the very next day. A key methodology that companies have employed to meet consumer demands over the years, and is still used to meet these modern requirements is 'Just in Time' manufacturing. However, with supply shortages, dwindling HGV driver numbers, the pandemic and Brexit, there are real fears that the Just in Time economy has had its day. Business Leader investigates. WHAT IS JUST IN TIME (JIT) MANUFACTURING? Lean manufacturing, or Just in Time (JIT) manufacturing as it’s also known, is an inventory management system where goods are produced as they are required and is designed to increase efficiency and decrease waste. Under the system, a company only receives the raw materials they need as they are required for the production process, meaning lower inventory costs. The system was adopted by Japanese car manufacturer Toyota in the 1970s, so it is also referred to as the Toyota Production System (TPS). The success of Just in Time manufacturing depends on steady production, high-quality workmanship and no machine breakdowns.
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Reliable suppliers are also essential for ensuring the materials used in the production of goods are received in time for production schedules. Otherwise, there is a risk of companies being unable to create their products. If suppliers are unreliable, a company might also have to order more materials to ensure they are available when they need them, but this goes against Just in Time manufacturing principles and means inventory costs are increased. IS IT THE END OF JUST IN TIME? In a survey by the Road Haulage Association (RHA), a private company dedicated to the interests of the road haulage industry, they estimate that the UK is currently short of more than 100,000 qualified HGV drivers. According to the Office for National Statistics (ONS), from June 2017 to June 2021, the number of HGV drivers in the UK also dropped by 53,000, from 321,000 drivers to 268,000. As a result of the HGV driver deficit, there have been widespread reports of supply shortages, including food and petrol. This raises important questions concerning whether the days of the Just in Time economy are numbered. However, Pol Sweeney, Vice President Sales EMEA Fleet at Descartes Systems, believes that with more flexible and responsive supply chains, the Just in Time economy can continue. “The fundamental drivers that created the Just in Time economy have not gone away,” says Pol. “If anything, the recent combined effects of Brexit and Covid-19 have heightened the need for flexible, dynamic, and highly responsive supply chains.
Pol Sweeney Vice President Sales EMEA Fleet Descartes Systems
“Increasing digitalisation and supply chain optimisation through the use of AI systems and techniques will be required to provide the improved responsiveness and the increased efficiency required to deal with the recent disruptions and unpredictability. “When you are dealing with a scarce, and/or expensive resource such as HGV drivers, the answer is to use them efficiently and effectively. The efficiency
December/January 2022