The just-in-time model isn't dead, it just needs to be nimble and agile, says Tevin Tobun
We shouldn't have to worry about food and fuel shortages when all we need is a little versatility in the supply chain, says Tevin Tobun.
Billed as one of the linchpins of the British economy, just-in-time (JIT) manufacturing has come under scrutiny in a new world dominated by Brexit and pandemic Britain.
Critics say the shortages we have faced, from supermarket products to missing ingredients, are a direct consequence of JIT as the unstable economy causes the model to wobble. However, JIT will never work if all the component parts are not thought through, even in the best of times. JIT isn't the issue, the failure to adapt to changing circumstances is.
JIT was developed in Japan in the 1970s, when Toyota set out to minimise inventory levels. JLT manufacturing focuses on creating goods that meet customer demand by only producing what is needed, when it is ordered, and only in the quantity desired.
Race to the bottom
Over the last decade, we have seen a push to deliver services at the lowest possible cost. This race to the bottom is arguably one of the key components behind many organisations and supply chains building their models around JIT manufacturing and delivery.
As well as reducing the need to hold large amounts of in-house stock and pay costly storage overheads, it also reduces wastage and allows businesses to keep their prices low. It's a model that has largely worked well in recent years. However, its success has been dependent on a fluid economy, speed of purchase and, crucially, speed of delivery. When large trawlers fail to deliver goods across the country, consumers start to see the gaps on their shelves.
Finding a solution
The answer to this problem is simple: last-mile delivery. As implied by its name, it completes the final phase of the supply chain – delivery from distribution centres to end-users. Given that the primary goal of last-mile delivery is to get the product to the end-consumer as soon as possible, it is often regarded as the most important part of the logistics process. In fact, reports state that the global last-mile delivery market is projected to grow to around £44b by 2025, up from £23b in 2018 and £29b in 2020.
It helps to keep industries nimble, connecting suppliers and operators more efficiently and mitigating the problem of slow supply chains. Though it can be a challenge to co-ordinate, with many variables, such as the delivery location relative to the warehouse or distribution centre to the number of deliveries along a carrier's route, last-mile providers, by the very nature of their work, have to be nimble and agile and be able to find solutions to issues thrown at them at the last minute.
For example, during the current crisis, we simply cannot accept food not being delivered to schoolchildren, hospitals or other critical sites. Through our software, we are able to change and reroute our drivers to mitigate any blocks or challenges from day to day.
Adapt to survive
Rather than masses of goods being moved across the country, having a fleet of smaller, nimble, agile drivers in the tighter, more densely populated areas will ensure business keeps moving. Had we seen more last-mile providers involved in many of the sectors recently struggling with delivery of produce, we'd probably have felt the impact a little less.
Outside of the practical delivery benefits, last-mile operators are also able to use a more flexible workforce – something which appeals to both employers and employees – particularly during these strange times. It gives you access to a wider pool of people.
Ultimately, more last-mile services will help to alleviate some of our existing challenges. JIT can still work and is effective, but it needs last-mile providers to function.
Tevin Tobun is chief executive and founder of GV Group (Gate Ventures)
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