In a recent interview with ET Infra, Mr. Vineet Agarwal, MD – TCI shared his views on which inventory system will sustain in the future, ‘just-in-case’ or ‘just-in-time’?
Today, with the rapid growth of the e-commerce industry & emergence of D2C brands, inventory availability has become very critical. Most companies are going for the approach of having more than adequate inventory at all times, in order to avoid delays and maintain sales. Therefore, the shift from ‘just-in-time’ to ‘just-in-case’ is quite evident.
Going forward, the choice between which inventory management system to opt for will differ from company to company and model to model. It won’t be a uniform thing as some companies would like to ensure the availability of extra inventory while some companies would revert back to the just-in-time inventory system. For now, companies are ensuring that, they are sort of just-in-time and just-in-case as well. The emergence of Nearshoring as a trend proves this to be true. Previously, companies used to have a very broad supply chain, following the pattern of getting different parts from all over the globe, say one from China, another from Vietnam and so on. Now they are looking at something that is deeper, for example: finding a supplier here to bring in more predictability.
Another significant change is that the companies are now going down to the tier three & tier four level suppliers. This is because your supply chain is as strong as the weakest link. So, if the tier three supplier is not able to produce, it will have an impact on the tier two, hence impacting the tier one supplier and major OEMs (original equipment manufacturers). So, going down to the next level in order to ensure that the supply is robust and available whenever there are challenges. With a predictable supply chain, working efficiently is definitely possible. Maybe not just-in-time and not even just-in-case, but somewhere in the middle and that might be the best option.
To read the full interview, click here: https://infra.economictimes.indiatimes.com/news/logistics/interview-nearshoring-as-a-trend-has-emerged-to-ensure-predictable-and-robust-supply-chain-vineet-agarwal/93751826