EASA Aviation Integrating Lead Time Management and Just-In-Time (JIT) Inventory Management

Sofema Online (SOL) www.sofemaonline.com takes a deep dive into Integrated Inventory Management Systems

Introduction - Integrating Lead Time Management and Just-In-Time (JIT) inventory management.

The primary focus is on reducing the time it takes to receive goods once they are ordered. This includes optimizing supplier lead times, internal processing times, and transportation times. Involves understanding and effectively coordinating the two concepts.

Differences Between Lead Time Management and JIT

Lead time management primarily aims to reduce the time between ordering and receiving goods. JIT, on the other hand, focuses on minimizing inventory levels and aligning inventory replenishment closely with demand.

While lead time management and JIT inventory management have different focal points, they are closely intertwined in the pursuit of efficient and cost-effective inventory management.

Both play significant roles in inventory management but focus on different aspects:

• Lead time is the time duration between the initiation of a process and its completion.
• In inventory management, it typically refers to the time taken from placing an order for supplies or parts until their receipt.
• JIT is an inventory strategy where stocks are kept to a minimum, and orders are placed just in time to meet demand. It aims to reduce inventory carrying costs and increase efficiency.

>>  JIT focuses on aligning order schedules closely with production schedules or demand, ensuring that inventory does not sit unused for long periods.

>>  Implementing JIT involves accurate demand forecasting, strong relationships with reliable suppliers, and a flexible and responsive ordering system.

Integration Best Practices

• Despite their differences, lead time management and JIT are complementary in effective inventory management:

>> Accurate demand forecasting is essential for both JIT and managing lead times. It helps in understanding when to place orders and in what quantities, considering the lead time.

>> Close collaboration with suppliers is crucial. Suppliers need to be informed about your JIT strategy and must be capable of meeting the shorter lead time requirements.

>> While JIT aims to reduce inventory, having a small buffer or safety stock can be a strategy to counteract uncertainties in lead times, especially for critical or high-usage items.

>> A flexible supply chain is capable of handling changes in order schedules, which is a frequent occurrence in JIT systems. This flexibility is also essential to adapt to variations in lead times.

>>  Use of advanced inventory management systems can help synchronize order placement with lead times and JIT requirements. These systems can automate order processing, track inventory levels in real-time, and predict future inventory needs.

>>  Continuous Improvement and Monitoring: Regular review of both lead time and JIT performance is necessary. This involves monitoring supplier performance, lead time variability, and the efficiency of the JIT system.

Next Steps

Sofema Aviation Services www.sassofia.com and www.sofemaonline.com provides EASA Compliant Regulatory Training and Vocational Courses for the Aviation Supply Chain. Please see the websites for more information or email team@sassofia.com