EXAMINATION OF ON-TIME
DELIVERY SERVICE IN A
JIT ENVIRONMENT
IN BRIEF
Adopting just-in-time (JIT) inventory principles has enhanced production operational efficiency,
cost effectiveness and customer responsiveness for many organizations. But the real key to
success is providing a solution that applies JIT principles to the specifics of each client’s
industry and accurately tracks and delivers on-time performance, regardless of industry
conditions, leading to the greatest competitive advantage.
OVERVIEW
Businesses have long sought to match supply to anticipated demand and smooth out the
production cycle by sufficiently stocking inventory. In the past, managers kept the workforce
busy moving materials and goods from the assembly line to the docks while relying on the
marketing department to stimulate additional demand. However, as the cycle repeated itself
seemingly ad infinitum, unneeded and even obsolete product inventory increased, leaving
manufacturers unable to shift production to meet changing tastes.
A carefully planned and systematically executed just-in-time (JIT) system can eliminate waste
and encourage higher-quality output. The closer you can produce a true JIT situation, the more
responsive you will be to your customers and the less capital you will have tied up in raw
materials and finished goods inventory, both of which translate into real savings.
However, JIT implementation does incur significant risks. To begin with, JIT is a continuum; the
closer you get to full operational capacity, the more beneficial it is for business. On the other
hand, if the tipping point is exceeded and your client is left with insufficient inventory reserves,
the result could be damaging. In addition, JIT requires high initial investment and long-term
commitment from any company looking to implement, and that investment comes with no
guarantee of success, making it that much more critical to choose the correct transportation
management solution.
THE PROCESS
In order to meet our customer delivery expectations, a policy of best practices was instituted,
which regardless of industry conditions will help secure capacity and contribute to world-class
on-time delivery service within the ever-changing JIT environment. From that decision, multiple
new procedures were implemented, including the following:
• Establish open and trusted communication channels among all engaged parties
(Unyson, our customer and our carriers) throughout the entire process.
• Ensure all goals and expectations are established and that all parties are aligned.
Just as importantly, quickly determine if someone can’t do something so we can find
an alternative solution.
• Confirm that all parties are committed to achieve these goals.
• Clearly define “on time” so everyone knows how they are being measured.
• Execute and share detailed on-time metrics so past and current performance is
measured and communicated and allows corrective action to be implemented when
a need is identified.
• Ensure all parties have 24/7 operations that are fully empowered to make decisions.
• Build flexibility into the process so that when situations change, as they inevitably do,
all parties can adapt and manage what comes next.
• Ensure all parties have a high level of ownership in the process and that this ownership
extends beyond their own segment, so that everyone understands what’s needed, when
it’s needed and who is responsible.
• Don’t allow assumptions to become part of the process. That means customized, not
out of the box, solutions for every scenario.
BENEFITS THROUGHOUT THE SUPPLY CHAIN
Customer:
• A commitment to strive for savings
• A commitment to elevating our clients’ supply chain with best in class practices
customized to fit our clients’ needs
• Enhanced communication
• Clear objectives
• Quick, easy access to applicable metrics
• 24/7 customer support
• Improved visibility by providing on-time delivery reports by plant, specifying detailed
reasons for late loads
Carriers:
• Partnerships grow as engagement, commitment and trust is strengthened
OVERCOMING OBSTACLES
Although there are many advantages to JIT, the first challenge to overcome is to understand that
on-time operational objectives are not the responsibility of the logistics or inventory manager
alone to implement. It requires coordination and cooperation throughout the organization and
across teams.
Any and all customer concerns should also be discussed in detail with customers prior to
initiating the process. In addition, processes should be outlined to customers and vendors to
ensure key stakeholders are aware of their responsibilities.
“Unyson is the best decision I’ve made in the last 8 years. I sleep easier at night with them
as my partner.” -VP, premier manufacturer of PET containers
PROVEN RESULTS
A LEADING MANUFACTURER OF PET CONTAINERS
The Challenge:
The company operates in a just-in-time environment for four production plants and requires
99.2% or more on-time delivery. Our client sought external options to achieve the following goals:
• Leverage a network to attain the most favorable pricing
• Increase internal awareness and integrity of transportation costs
• Improve visibility of actual on-time performance
• Transition freight payment to a third party
The Solution:
Unyson provided a complete transportation management solution including:
• Implementation of a network bid for all inbound and outbound freight Unyson manages
100% of the carrier network (30,000 annual loads)
• Unyson assumed all freight payment responsibilities and generated weekly reports to
the company, detailing transportation costs
• Unyson provided 24/7 customer support
• Improved visibility by providing on-time delivery reports by plant, specifying detailed
reasons for late loads
Today, each plant has a designated customer base and the
majority of our loads move on a high volume network with
numerous loads delivered into each customer location on a daily
basis. The dynamic environment leads to daily order changes as
well as cancellations, add-ons and time changes. Unyson
dedicates significant time and effort managing these changes
and our carrier base is extremely stable because we designate
carriers in place for the majority of the loads.
CONCLUSION
Examine your current process and think about common pain
points. Best practices require change management, but in a JIT
environment where all cylinders must be in sync, such change is
an everyday necessity.
In an environment that measures on-time performance down to
the minute, Unyson has a near 100% success rate. And even
after a nine year partnership, we continue to show value despite
the tight truckload industry status by consistently going beyond
what is normally done within the ever-changing JIT environment.
About Unyson:
Unyson is the third party
logistics division of Hub
Group that specializes in
elevating supply chain
performance by using
industry-leading practices,
experienced professionals
and state-of-the-art
technology. We look for
continuous improvements in
your network and strive for
meaningful supply chain
savings.
For more information on our
customized, industry-leading,
transportation management
solutions, please visit
www.unyson.com.