29 Nov 2019

How Shipkoo Utilizes JIT Techniques and Maximizes Lead Time

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What is JIT? This is an inventory method that controls the movement of products, materials, or components by delivering them when the organization needs them. This philosophy is mostly used by companies to ensure that parts and materials are supplied the very moment they are required in the factory during the production process. Shipkoo employees this philosophy by using Shipkoo’s eCommerce origin fulfillment model which does not only enhance cost-effectiveness but also saves time. This is applied by Shipkoo by sending shipment directly from the fulfillment center in China immediately when the order is received.

The principle of JIT system involves total quality control, elimination of waste, and people involvement. Besides, it integrates JIT inventory management principles which are essential in ensuring that the organization reduces inventory and improves operations within the organization. some of these principles include:

  • Reduce buffer inventory
  • Improve material handling
  • Reduce lot size and increase the frequency of order
  • Seek reliability
  • And seek zero inventory

The above principles are related to Shipkoo as it deals with the logistics industry and they are applied to achieve the main objectives of the company which includes: lowering inventory risk, lower duties, lower the cost of pick and pack, and fast deliveries through express shipping.

Through the integration of the JIT philosophy, the company is in a position to achieve numerous implications in the execution of logistics services to its client: transportation becomes a vital component and communication becomes more effective due to the effective flow of goods. Since the materials, components, and products are transported in the very moment they are needed, the company becomes capable of minimizing the obsolescent of the items that can become obsolete anytime due to lower demand or substitutes.

Shipkoo is also at its best in maintaining the shortest lead time possible. Lead time is the interval of time between the process initiation and completion. Several Lead-time approaches have been applied in Shipkoo, which include:

  • Customer lead-time: the amount of time taken between order confirmation and order fulfillment
  • Factory/production lead time: the amount of time it takes to build and ship a product if all the materials are available
  • Material lead-time: the amount of time it takes to place an order with a supplier and receive it, from confirmed order to having it on hand
  • Cumulative lead-time: the total amount of time it would take from confirmed order to delivery of the product if you had to order

Shipkoo has been able to maintain the shortest lead time possible as it can be seen in its partnership with Zulily and Drop companies. Shipkoo ensured that the companies get their orders quickly within the lowest time and cost possible. Initially, this was a challenge to them, but now this is considered a done and dusted issue. This is nothing but JIT technique and lead times that not only ensures that delivery time is minimized, but it also ensures lower costs are incurred.

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