When a company wishes to explore multiple markets, outsourcing warehousing and distribution to local providers allows for exponential growth and expansion with minimal investment. It is also far easier to “test” specific new markets without having to invest in any long term obligations.

The key is to source out warehouse logistics providers who cater to your specific needs, expectations and budget. Once these relationships have been established, it is a win-win-win situation…your company, the warehouse and your customers all benefit in their own ways.

JIT is a real space saver since a company will be able to function with less warehouse space for inventory storage. However, it gets tricky. The operators must be constantly aware of seasonal changes of demand for the product. As well, a sudden unexpected surge in demand for the product could potentially result in a shortage, which translates into issues of not being able to satisfy the customer. To be safe, to meet a 95% service rate, a company must carry about 2 standard deviations of demand in safety stock. Re-order levels should be reviewed regularly and charted historically to better assist in forecasting realistic future levels.

The Ford Motor Company was the first to use JIT. Today, many companies have adopted this effective and efficient inventory management method, resulting in billions of dollars in savings. Again, it is a tricky and delicate philosophy that requires careful and constant montitoring. Without that, it is doomed to failure. In short, the JIT inventory system is all about having “the right material, at the right time, at the right place, and in the exact amount.”

So if you feel your company would benefit from the many advantages of a JIT inventory system, have at it. Just make sure you think it through very carefully, making sure to include the smallest of details. You may hit a few bumps along the road at first, but after some strategic tweaking, you will have a refined and sophisticated system that will streamline your business, improve your bottom line and make your shareholders very, very happy.