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JIS delivery causes these problems for the supplier

Various car bodies are assembled on a production line using production robots.

Much of what you read about JIS processes is written from the customer's perspective: As a result, it is often claimed that JIS supply is such an efficient concept that it can reduce warehousing and save time and money. From the suppliers' perspective, however, things look different. This type of delivery is often dictated to them by customers and they have to implement it - with all the disadvantages. In this article, we therefore take a detailed look at the problems that suppliers face when starting or already working with JIS delivery.

Table of contents

High demands on logistics and warehousing

Just in sequence is a logistics concept. Accordingly, the most fundamental challenges can be found here: In contrast to just-in-time, where goods must be delivered in the right quantity at the right time, suppliers must also ensure that the goods are delivered in the right order.

This requires highly transparent and efficient logistics processes. Whether picking, packing or outgoing goods, it must be ensured that no errors occur and that everything is put together in time for delivery. If transportation is handled by the customer (or by a forwarding agent commissioned by the customer), your processes stop at your loading ramp. Otherwise, you must also ensure that the transportation runs smoothly.

In summary, this means that you need to know exactly what is being sent, how and when at every point in the process. With routing slips and cumbersome manual processes, you will quickly reach your limits.

What's more, the closer your company is geographically to your customer, the less time you have to carry out your logistics processes correctly. This is because you only receive the exact delivery call-offs from your customers at very short notice and sometimes have to have everything ready for dispatch within a few hours.

If you also have production processes, the challenge of transparent processes also extends to your internal logistics. When it comes to production supply and internal goods movements - even between different plants - all materials must be provided on time.

Requirements for production processes

Your customers usually request JIS delivery because they want to reduce warehousing and logistics processes in their company as much as possible. This is especially true if you supply particularly large components or if your goods have a large product variance. In both cases, a lot of storage space is required.

For you as a supplier, the situation is of course similar: if you produce particularly large components or many different variants, a high stock level is also expensive for you. Many suppliers who work with JIS processes therefore also want to reduce their stock levels as much as possible. If possible, production is also carried out in sequence for this reason. Ideally, this is referred to as one-piece flow. This means that you produce exactly one component in the correct sequence one after the other.

All the challenges that we have already described above for logistics processes also apply to your production in this case. This means that the production processes must be analyzed and the balance between batch size optimization, inventory costs and production in sequence must be found. The result can also be a mix or the splitting of the process into different sections.

An example from practice:

If you paint parts, every color change means set-up time for you so that your systems can be changed over to the new color. Therefore, several parts are normally painted in one color before switching to a new color. With sequential production, however, it can happen that you have to carry out a color change for almost every part. Here, for example, it can make sense to differentiate between high-runners and exotics and to consider storage for certain variants. The same applies to other machine set-up times. You may therefore need several production lines for sequential production so that you can produce efficiently despite set-up times. In addition, production in sequence also places greater demands on your parts supply or intralogistics.

Flexibility and adaptability

How do you deal with short-term changes in your production? Are your processes flexible enough to react to changing conditions within a few hours? The big difference between JIS processes and other delivery processes is the time pressure. There is little time to solve problems or even react to delivery call-offs that are received just a few hours before delivery.  

Internal changes therefore also have a greater impact than usual: if materials change or if you change your supplier, you have to adapt your processes (even if it is only their digital mapping). If there are problems with the supply of parts, you may not be able to produce or deliver in sequence. If your supply chain is not resilient, it may be necessary to build up larger stocks in your warehouse. This is the only way you can react to problems at short notice. It must therefore also be possible to monitor deliveries to you or between your plants very closely so that you have enough time to reschedule.

Communication and coordination with the customer

Anyone who has to deliver in sequence knows that the most important criterion is efficient and transparent communication with their customers. Digital call-offs via EDI are the standard for such processes. As a supplier, you usually need to ensure that your systems are set up to receive and process delivery call-offs from your customers correctly and promptly.

Customers who expect JIS deliveries from you often have very precise and complex requirements regarding how communication must take place, for example with EDI guidelines that are made available to you. Even material numbers that are managed differently in your customers' systems than in yours can pose a major challenge.

Another important factor in communication between you and your customers is system availability. As communication is exclusively digital, you need to ensure that you are able to receive calls from your customers at all times. Maintenance periods or other so-called downtimes must be planned in advance accordingly. You must have a contingency plan for outages so that calls can still be fulfilled.

IT integration and digital interfaces

Which brings us directly to your IT systems: it has probably already become clear that you need software solutions for the planning, control and execution of all JIS processes. This is the only way to ensure that processes run smoothly and error-free and that you are flexible enough to react to problems.

This means that, as a supplier, you have special requirements for your production and logistics systems. These must be able to fully cover JIS requirements. Many companies therefore work with specialized software that is geared precisely to these requirements.

Regardless of whether you want to map JIS processes with specialized software or with your existing ERP system, for example, they should always be seamlessly integrated into your company processes. Integration into your existing system landscape is therefore of great importance. 

 

In order to be prepared for problems here too - for example in the event of unexpected downtime due to a system failure - you should consider emergency scenarios at an early stage. One solution here could be an emergency system that takes over in the event of a failure of your IT systems to ensure that not only your JIS processes but also communication with your customers functions smoothly. The requirements in terms of integration capability and interfaces for such an emergency system are of course similar to those for your standard system.

Quality management under pressure

Even if you have ensured a fail-safe IT landscape, well thought-out production processes and smooth logistics, mistakes can always be made. Manual human intervention alone can mean that the quality of your products is not good enough, the wrong part is packed or a delivery is delayed.

To prevent such problems, it is even more important with JIS processes than with other delivery concepts that you incorporate well thought-out quality management into your process design. This means that you monitor the quality of parts during sequential production, that you introduce extra checks during picking or the compilation of deliveries, and that you check each delivery an additional time at goods issue.

This point is all the more important as it is not only about delivering as error-free as possible, but also about avoiding the consequences of a faulty delivery. In the automotive industry in particular, the consequences of missing or faulty parts are contractually regulated. As a supplier, you have to reckon with a poor supplier rating or even fines. The additional effort involved in their quality controls is therefore often worthwhile.

Cost control and efficiency

Those who agree to supply customers in sequence usually pay for the additional effort. The extra work you have to invest in systems or your process design can therefore pay off. However, the risk is also particularly high: the incorrect deliveries mentioned above and the associated penalties can threaten the economic viability of an entire company. You will no doubt be familiar with reports of idle production lines in the automotive industry and the resulting costs. If a car manufacturer can prove that a supplier is responsible, the supplier is liable for this failure.

This risk increases the demands on logistics and production processes immensely. The top priority is delivery in the right quality and sequence, which makes it essential to include additional process steps for quality assurance. The initial cost of introducing JIS processes in your company for the first time should also not be underestimated.

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