JIT vs JIC

Discussion in 'General Business Forum' started by Stevie Wonder, Apr 11, 2014.

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  1. Stevie Wonder

    Stevie Wonder UKBF Contributor

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    JIT vs JIC


    I know that this idea is traditionally attributed to manufacturing, but it is I think one of the most fundamental questions for many types of retail business.


    Now, I understand that many b&m businesses stock virtually every product they sell, if this is a necessity then this question doesn't apply. In my business, our products can, in this context, be split into two groups; products which we stock 'just in case' of a customers' requirement (stock), and those that we order as per the exact requirements of an order 'just in time'.


    Of course when we buy bulk stocks we can purchase the product cheaper as you would expect, but when we take an order and purchase a set amount as per the customers requirement we don't have any problems with tying money up in standing stock, although the profit margins are lower.


    Like many businesses, in the economic climate of the last few years I have tried to maximise profit margins to cope with a lower turnover. Therefore my initial thought is to throw caution to the wind and fill my shop with 100% stocked products, as using economies of scale these items will be purchased cheaper therefore margins go up, great! I have the big concern with a few problems this could lead to, such as; having a lower range of products on offer, being left with dead stock (nullifying the benefits of the move), and of course cash flow.


    I suppose this is a debate without a black and white answer I know, but I am interested to know how other b&m retail businesses have approached this and of course with what results???


    Thanks for reading!


    Stevie
     
    Posted: Apr 11, 2014 By: Stevie Wonder Member since: Mar 5, 2011
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