A new way to buy?

At the start of this year, GEP published a paper questioning whether traditional procurement models were suitable for a post-pandemic world. The argument was that in a world where risk and supply chain volatility are high, sourcing goods to arrive as and when they are needed – known as Just in Time (JIT) - might not be a sound model to use. They made the case instead for companies to hold a certain amount of stock in reserve, to be used as and when required. The model, known as Just-in-case (JIC), advocates a hefty buffer stock for when demand outstrips supply.

Opinions among experts are split. JIT originated in Japan in the 1970s when the car manufacturer Toyota sought to meet consumer demand by reducing flow times, waste and costs within the production system. The aim, according to CIPs, is to have ’zero inventories across the organization and its supply chain.’ It is a highly efficient model given the right conditions – it just so happens that a pandemic is not the right conditions.

Why the calls for JIC?

Throughout 2020 and for most of 2021, supply chains have been disrupted. To that end, holding onto additional stock is a natural reaction for companies burnt by shortages. But is that effective? In the short term, yes. Holding a level of stock means that businesses can meet demand for products or services when required to; it shields them from sudden or unexpected demands in supply and protects them from production or quality issues.

Moreover, JIC allows companies to diversify their supply base and reduce their dependence on key suppliers, further reducing exposure to risk. This approach can ensure steady supply during critical periods and prove to be more cost-effective in the short term. To that end, holding more inventory does make sense – though it isn’t a cure all.

The real issue…

While holding more stock would certainly have alleviated supply issues during the pandemic, it isn’t without its issues. Holding onto more stock inevitably means more money tied up in inventory as well as the problem of finding somewhere to store it. Over the long-term, it’s not that cost-effective either, especially given that cash is tight for a lot of organisations.

A more effective solution is to deal with the underlying problem: an ability to deal with the unexpected. For that, companies need to have better supply chain planning, greater visibility over their supply network as a whole and to form flexible and collaborative relationships.

This approach bakes in resilience and mitigates risk from the start, because rather than selecting suppliers based on price alone (i.e. the lowest cost), you select them based on adaptability. With a clear visibility over your suppliers’ networks, you are much more aware of risks too. Indeed, many companies suffered supply shortages during the pandemic not because tier 1 suppliers failed, but because their tier 3 and 4 failed.

The way forward

While JIT might have leaned out supply chains too far, it doesn’t wholly justify a lurch to JIC. Both have their merits. The principles of JIT that have made it successful still hold firm – it’s just a case of evolving them. Supply chains will always face disruptions, whether localised or global. It is impossible to predict when they will happen and what will ensue; to that end, being resilient and ready for them is essential.

The answer lies in the way we think about both JIT and JIC, and working toward a model that uses the best of both. It should be remembered that the idea behind JIT is to reduce waste and not eradicate it, and that JIC does not have to be all about bloated stock levels and long throughput times.

Taking advantage of the best technology has to offer can get the best from both models. Using data to monitor the market can help to identify at risk supply nodes. That in turn informs proper planning based on visibility over inventory – both at the company and market level. That type of strategic approach allows for backups in the form of targeted inventory buffering, and a lean, cost-effective supply chain that has built-in resilience and flexibility.

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Gareth has over 19 years’ experience in commercial procurement contract management across both public and private sector. Holding senior positions at the Ministry of Justice and Turner and Townsend Gareth has overseen several multi million-pound contracts.

Guiding I-Tel in best practice and sustainability while offering practical solutions to steer our procurement team towards red tape reduction and compliant, efficient services.

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Managing Director and founding partner at I-Tel Group. Mel has been instrumental in transforming the business from a start-up cartridge manufacturing facility to an innovative forward thinking procurement company.

With 15 years at the helm and in depth knowledge of I.T. infrastructure and data analysis I-Tel Group is today one of the latest key players in the indirect procurement space.

A co-founder from the outset Andy has headed the operations team for I-Tel group. An engineer by trade Andy has a vast experience in manufacturing, logistics and warehousing.

Overseeing the day to day complexities of our hybrid model and ensuring all the individual parts function to produce the seamless highly efficient business model we see today.

Paul has over 30 years’ experience in B2B sales in both the public and private sector and heads up our client services division. Overseeing high value public and private sector contracts Paul has in depth knowledge of the industry.

Key contact to senior management and C suite clients with a problem solving, customer service excellence ideology.

An impressive background with blue chip companies Dee is a former global B2B Commercial manager for Dyson. A proven track record in marketing and communications Dee is responsible for I-Tel’s client onboarding and messaging.

With huge experience in strategic international campaigns and working effectively in cross-functional teams Dee brings strong commercial acumen alongside an excellent ability to interact and influence at all levels.

James is a fellow of the institute of chartered accountants and has held senior positions with PwC and most recently Azets. He plays a pivotal role in providing financial direction and guidance for integrated solutions.

Experienced in dealing with group reorganisations, acquisitions and disposals and has significant experience of working with companies under UK GAAP, US GAAP and International Financial Reporting Standards (IFRS).

Gareth is a qualified, senior commercial solicitor with 30 years’ experience. As counsel to the directors Gareth brings a wealth of experience to enhance I-Tel’s legal compliance and ensure supply chain legitimacy.

Overseeing all our commercial agreements and supporting the individual requirements of our clients, Gareth brings tremendous credibility to the whole organisation.

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In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

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In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

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In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

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In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer a pharetra ante. Sed non porttitor purus, vitae pretium erat. Proin dapibus dapibus sapien, in euismod elit venenatis at.

In iaculis, est ultrices interdum semper, lorem sapien consequat elit, nec viverra odio justo et dui. Quisque sed rutrum quam. In suscipit velit nec finibus sodales. Orci varius natoque penatibus et magnis.

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