Intralogistik für Fashion & Textil
15. July 2024

Efficient logistics: combination of just-in-case and OTIF

In modern warehouse management, companies are faced with the challenge of organizing their inventories both cost-efficiently and reliably. Two main strategies have been established in this area: just-in-case (JIC) and just-in-time (JIT). While JIT focuses on demand-oriented production and storage, just-in-case logistics focuses on holding sufficient inventory for every kind of eventuality. In this blog article, we shed light on the just-in-case (JIC) principle, its advantages and challenges, and its implementation in practice. We will also show how the combination with the OTIF key figure (On-Time, In-Full) maximizes efficiency and customer satisfaction.

How the just-in-case strategy works

The just-in-case strategy is based on the idea that companies produce, deliver and store raw materials and finished goods in advance. This allows them to ensure that there is always sufficient inventory available to bridge potential disruptions in the supply chain. This method makes it possible to keep excess inventory in the company's warehouses, ensuring a continuous supply even during unforeseen spikes in demand.

 

Advantages and challenges of the just-in-case method

Advantages:

  • Safety stock: Companies can fulfil all orders on time and thus increase customer satisfaction.
  • Cost planning: By planning production and transport in advance, costs can be better controlled.
  • Responsiveness: In the event of sudden changes in demand, the company can react more quickly and strengthen its market position.

Challenges:

  • Higher storage costs: Storing large inventories leads to higher costs, especially for perishable goods or products of different sizes.
  • Risk management: There is a risk of excess inventory, which ties up capital and takes up storage space.

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Implementation of the just-in-case strategy

 

Successful implementation of the just-in-case (JIC) principle requires a well-organized warehouse structure and efficient management systems. This is where modern warehouse management systems such as the WERX software suite from TGW Logistics come into play. Our software automates the management of warehouse items, ensures precise traceability of products and minimizes picking errors.

OTIF: Monitoring of logistics performance

A key performance indicator in logistics is OTIF (On-Time, In-Full). OTIF measures the proportion of deliveries that arrive at the destination according to the quantity and schedule specified in the order. This metric provides accurate information about a company's logistical performance and has several advantages:

  • Improvement of customer satisfaction: The logistics service meets the agreed quantities and delivery conditions.
  • Reduction of logistics costs: A high OTIF percentage indicates a reduction in product returns, which are among the most costly operations in logistics.
  • Warehouse optimization: A high proportion of timely and complete deliveries makes it easier to plan and optimize the different areas of the warehouse.

Combination of just-in-case and OTIF: benefits for customers

The combination of the JIC strategy with a high OTIF ratio offers significant benefits for customers. Just-in-case logistics ensures that there is always sufficient stock to fulfill any order, even in the event of sudden spikes in demand or supply chain disruptions. At the same time, a high OTIF rate ensures that these orders are delivered on time and in full.

This combination leads to higher customer satisfaction, as customers can be confident that their orders are not only available, but also delivered on time and in the desired quantity. This minimizes the risk of stock-outs and delivery delays, which is especially crucial in times of increasing e-commerce demand and short delivery windows.

 

Conclusion: Efficient logistics with TGW Logistics

With the just-in-case strategy and a high OTIF rate, it ensures that companies can optimize their logistics processes while maximizing customer satisfaction. Digital warehouse management enables efficient and error-free logistics that meet both the requirements of the modern market and the expectations of customers.

TGW Logistics offers comprehensive solutions that combine the advantages of JIC inventory management and OTIF. Our wide range of leading bearing technologies has been appreciated by our customers for many decades and is particularly suitable for a wide range of product sizes. If you need help optimizing your inventory management, get in touch. With our tailor-made logistics solutions, we design your warehouse processes efficiently and reliably.

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