“Just In Time” Material Supply
A just-in-time (JIT) inventory system has a manufacturer receive raw materials as close as possible to when they are actually needed. It is a management strategy that minimizes inventory and increases efficiency.
When we spoke to some senior executives, one of their major concerns is how to make the material delivery close to ‘Just In Time’. “Is it even possible in our industry?” One of them asked.
In order to deliver quality concrete on time, Ready Mix Plants are understandably hoarding materials whenever they can by arbitrarily filling their silos and ordering cement deliveries in prime time (ex. 7 am). These activities cause excess inventory, resulting in wait times at the plants, and add to extra costs for the excessive inventory, extra cost on trucking, diversion charges, and demurrage charges.
These activities also have a big impact on Haulers: not being able to unload materials has a trickle-down effect on the entire delivery schedule, causing delays for the later deliveries. Not to mention billing disputes.
Then what about the Material Suppliers? When everyone wants that delivery at 7 am, it creates a bottleneck at the load-out. Suppliers struggle to meet the demand or risk losing customers.
So, how to address this challenge? What if the real-time inventory and material demand were visible and can be easily accessed by Concrete dispatchers, Plant managers, the Logistics department/material schedulers, and Material suppliers – not only for today but for tomorrow and the day after? And this material demand takes your upcoming orders, your inventory level, and the minimum on-hand required for each material into account?
Stay tuned for a real-time inventory and Material Demand dashboard to be presented in the coming weeks
