Just-in-time is alive and kicking!

Increasing geopolitical tensions and trade barriers, as well as congestion and strikes, present companies with new logistical challenges every day. "It is absolutely true that constant supply chain disruptions make JIT more difficult," Van der Veen explains. "During the coronavirus crisis, many companies declared JIT outdated. But that is not true."

"By daring to be transparent as chain parties and sharing information with each other, potential disruptions can be prevented even in a VUCA world, and efficiency and cost benefits can be achieved jointly. The systems for such chain cooperation are available." 

Jack van der Veen
Professor supply chain management

Continuous improvement

JIT originates from the Toyota school of Lean working. Minimising waste and maximising customer value are central to this. Goods are produced at exactly the right time, in the right quantity, and then delivered to the right place at the agreed time. As a result, stocks remain low or, in an ideal situation, are even unnecessary. "I hope that companies understand the underlying principle in particular. The basis for Lean and JIT is the ambition to constantly improve," Van der Veen continues. "JIT does not mean that everything necessarily happens just-in-time. Toyota does not operate entirely without stocks. With all the current disruptions, that would be foolish. What matters is that, as an organisation, you want to move forward and be transparent about it. There is always room for improvement. To measure is to know, is to improve."

Searching for a win-win

In principle, it's all about the mindset of companies, according to the professor at Nyenrode Business University. "In a VUCA world, many companies seem to opt indiscriminately for increasing their stocks. Or for switching from single sourcing to multi sourcing. It would be much smarter to work with all your existing partners in the chain to consider how things could be done differently given the circumstances. Based on logical self-interest, work together to find a win-win and common interest. It is essentially the same principle on which institutions such as the European Union and the United Nations are based, although on a completely different scale."

Breaking through trade-offs

Van der Veen sees this as the basis for eliminating so-called trade-offs in current supply chains. In today's VUCA world, many companies tend to trade off the fundamental customer values of cost, quality, speed, reliability, flexibility and sustainability. For example, by prioritising greater flexibility (VUCA) over lower costs (JIT) or by choosing speed (VUCA) at the expense of sustainability (JIT). "I really see breaking through such generally accepted trade-offs as innovation."

"My call to the Dutch logistics sector is to tackle this challenge in concrete terms," the professor concludes. "Chain collaboration makes it possible to achieve both. Both more flexible and cheaper, both more sustainable and more profitable. Everyone benefits from this. An IT system is one way to facilitate this. Provided that the strategic goal to be achieved is clear and you prevent resistance by involving everyone in the process from the outset."