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Just-in-time Business Practices

Ever wonder what has allowed the proliferation of warehouse stores, grocery stores, department stores, corporate globalism, etc.? It's the business practice of "Just-In-Time Delivery" of inventory.

In simple terms, what this allows is for stores to construct many smaller stores, rather than fewer larger stores, because they don't have to keep a large, long-term inventory. Grocery stores, in particular, have an electronic automatic ordering system using the cash register scanners. Each purchase is recorded electronically and adjusts the store's inventory, which generates a daily or weekly order for goods. This order is relayed to a distribution center, which puts together the refill order and then ships it to the store "just in time" to meet their dwindling supplies. The distribution center also has electronic inventory control, and when it ships out merchandise it generates an order to the manufacturers or suppliers, which generates orders for production.

Great idea, right? It's working well, so far, and in mostly optimum circumstances. The problems may arise if there is a breakdown in communication, or a breakdown in the delivery system, due to disasters, power outages, earthquakes, etc. Orders can't get out, trucks can't get in, stores are emptied out in a matter of a few hours, and people run out of basic supplies. Other problems may occur when there are shortages of materials for production, when actual manufacturing can't meet the demand for goods.

Practices Business Just-in-time

This is a good way to look at supply and demand. From what I understand out their software is that it even takes into account how much of a certain product was sold the year before on certain days to ensure proper stock was ordered on certain products around holidays such as thanksgiving turkeys and christmas hams.

Aside from the obvious reasons that stores use a "just in time" delivery system for their inventory such as money in inventory, computer automation, ect. you must also see where perishable items play into this role. Breads, fruits, vegtables, milk, and other parishable items that only have a week or maybe two week long shelf life before the sale is a good example of why this type of delivery system is not only economical for the stores to use but also practical to ensure quality food every time you walk into the store.