Pretty much contradicting just-in-time manufacturing fundamentals, just-in-case manufacturing advocates maintaining sufficient inventory so that any supplier delays or sudden demand scenarios can be competently addressed.
- Sufficient stock means the chances of missing deadlines or not meeting order requirements are technically impossible.
- The practice lets companies serve their buyers in a highly risky and competitive environment. The response time is much better than JIT manufacturing.
- There’s lesser dependence on suppliers. As a result, any supplier shortfalls are unlikely to affect production.
- A company can stockpile during low prices and safeguard itself when the prices go up.
- Warehousing costs rise since there is substantial space needed to accommodate excess stock.
- Capital in the form of excess stock is locked and also a dedicated team is needed to supervise warehouse and transport items from the storage area, especially if the warehouse is located some distance away.
- Perishable goods such as food don’t go well with the just-in-case setup, because there’s no definite answer as to how long the stocks will remain within the warehouse.
- Wastage resources are quite likely since inventories need to be maintained.
Despite the positives and increasing adoption rate of just-in-time manufacturing, several manufacturers are still sticking with the just-in-case production method because demand is always unpredictable. And holding a few weeks or even days of inventory helps tackle urgent orders.