Executive Briefings

Just-in-Time Remains Viable and Relevant, says MIT Center for Transportation & Logistics Head Says

Just-in-time won't suddenly become redundant in the post-recession economic environment, says Chris Caplice, executive director for the MIT Center for Transportation & Logistics in Cambridge, Mass. "The fundamental lean principles that underpin JIT are still relevant, and the pressure to control costs will continue to be unrelenting. But companies will have to put more effort into understanding how to minimize inventory while meeting customer-service needs." That's tricky to balance, particularly in risk-prone global supply chains, says Caplice, who notes that a lot of work in this area has been done at MIT. "We've developed a simulation model of a global distribution network that enables supply management professionals to 'test drive' inventory disruptions and mitigation strategies. In fact, what our research has shown is that there are other ways to protect a supply chain against disruptions than simply adding extra inventory. Network flexibility strategies (such as multisourcing, transshipping or modular production capabilities) are all JIT-compatible methods for risk mitigation." 

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Just-in-time won't suddenly become redundant in the post-recession economic environment, says Chris Caplice, executive director for the MIT Center for Transportation & Logistics in Cambridge, Mass. "The fundamental lean principles that underpin JIT are still relevant, and the pressure to control costs will continue to be unrelenting. But companies will have to put more effort into understanding how to minimize inventory while meeting customer-service needs." That's tricky to balance, particularly in risk-prone global supply chains, says Caplice, who notes that a lot of work in this area has been done at MIT. "We've developed a simulation model of a global distribution network that enables supply management professionals to 'test drive' inventory disruptions and mitigation strategies. In fact, what our research has shown is that there are other ways to protect a supply chain against disruptions than simply adding extra inventory. Network flexibility strategies (such as multisourcing, transshipping or modular production capabilities) are all JIT-compatible methods for risk mitigation." 

Read Full Article