Recent developments have once again confronted us with the facts. Entire car factories came to a standstill because there were no parts and the new cars could not be finished due to the lack of a few components. Necessary microchips could not be delivered or only with great delays and the production mill came to a standstill. Parking lots full of half-finished cars, waiting for a few small components. And it wasn’t just the auto industry that was affected. The question then arises what the cause is and whether it could have been prevented.

In the search for an answer, a number of things and events play an important role.

In fact, we have to go back to 1950 when the concept of JIT, or Just-in-Time, was invented in Japan. Taiicho Ohno and Kiichiro Toyoda stood at the cradle of this development. And if one knows that the latter founded the Toyota Motor Corporation in 1937, it is perhaps clear that the Toyota factories introduced the Just-In-Time principle as one of the first organizations.

However, it was not there on its own, but was part of the so-called Kanban system, a logistical way of using signals such as colored cards, lights, flags or signs to indicate that an item is almost finished or that the last product from the shelf has been taken. A concept that is often used in the context of Just-In-Time and which was introduced in many companies a few years ago is Lean Management.

What do these terms mean and why did the system become so popular?

The ultimate goal of things like Lean Management and Just-In-Time deliveries was to improve efficiency in the production chain and reduce costs. Instead of holding large stocks (the JIC or Just-In-Case principle), the materials necessary for production were only delivered shortly before they were needed in production. So only the minimum necessary stock was kept. After all, a lot of stock means large warehouses. And that costs money without adding value, so the idea.

It is important in this entire system that the entire production chain is well coordinated and that auxiliary and raw materials are delivered on time. So it only works if the producing company, its employees and its suppliers all work together. And that all necessary materials are delivered on time by the suppliers. For the companies that successfully introduced this a number of years ago, this has yielded major financial benefits.

Does the Just-In-Time principle have any disadvantages?

We have been confronted worldwide in recent years with the disadvantages associated with Lean Management and Just-In-Time. A weak link in the chain is the timely delivery of materials necessary for production. Especially if these materials have to come “from afar” and have to travel half the world before they can be processed in a factory.

Things like strikes, wars, natural disasters or pandemics can paralyze the entire chain. The consumer can show a hoarding behavior that leads to shortages even for the most banal daily necessities. Due to trade embargoes and the resulting scarcity on the market, prices are going up. Consumers can no longer afford certain things. Staff are fired. The (global) crisis is a fact.

And that this is not fiction has been clearly proven in recent years and events such as the Covid-19 pandemic, the blockade of the Suez Canal, the war in the Ukraine, the trade conflict between the USA and China and various natural disasters.

A solution?

As a production company that manages its stocks according to the JIT system, it could therefore be good and important to think about alternatives so that stagnant deliveries do not put too great a strain on the company’s results. Should this then become an intermediate form, a hybrid, between JIT and JIC? Where as few stocks of raw materials and consumables as possible are kept, but a safety stock is always present as a buffer to absorb fluctuations. This may not provide a solution for long-term stagnations, but it may be possible to bridge short periods.

Do PIEK or IPC also apply the Just-in-Time principle?

If we talk about the IPC certificates, this would mean waiting as long as possible to recertify. As known, an IPC certificate is valid for 2 years and always up to and including the last day of the month. In principle, therefore, one could wait until that last day and only then take the necessary exam. But why should you take this risk, after all there may be no exam opportunity on that day. It is therefore wiser to schedule a recertification exam in time, you can do this 6 months before the expiration date and then remain in the same cycle, your new certificate links seamlessly to the old one, valid until the original date plus 2 years. PIEK tries to guide and approach its customers in a timely manner so that an optimal time can be chosen to recertify participants. An instrument for this is our so-called Reminder Service.