Why JIT implementation should be your #1 priority

What is the industry that you imagine has the tightest incident resolution time of them all? On answering this question a few come to mind like: Aviation, Automotive, Chemical, Nuclear etc.

Well, you will be surprised… but all and none of the above.

In reality, a mattress factory can have the same IR level as a nuclear power plant in terms of incident resolution. Indeed, the impact in case of … disaster … is significantly different but their expectations may be the same: keep the business going no matter what.

Why? Because of JIT (Just in time delivery). This is a concept that has many meanings and puts pressure on many parts of a business. See only a very small selection below:

• Finance — 0 stock — this is extremely important when you imagine stocks are a liability and a cost;
• Quality — suppliers deliver good quality components at the specific moment (no storage needed);
• Logistics — components in final product out without quality issues and wasted effort;
• HSE (Health, Safety and Environment) — the continuous production & release flow creates a velocity that is not easily sustainable and there is a real pressure in reducing one’s carbon footprint (recycling, energy consumption etc);
• Maintenance — on time delivery of fixes in as little downtime as possible;
• Engineering — integrate all potential solutions that will optimize the flow and plan future developments;
• Production — identify and eliminate bottlenecks.

This very simple concept has so many sides to it and it is so tied up into many other concepts that it’s simply hard to implement on it’s own. It is one of the key concepts that show a business’s maturity level in one simple glance.

Let’s take a leap 10 years into the past when the last financial crisis struck. The companies that had huge stocks took the hardest hit due to the multitude of ramifications that this concept has. I do not know whether the proper JIT implementation would have reduced the impact of the crisis but they sure would have been more prepared. I clearly remember images with hundreds of vehicles just “resting” in giant parking lots because they were produced but no one was buying.

In today’s terms I see this waste everywhere and I can’t but consider in how many industries this concept should be more in focus. The future belongs to companies that are sustainable and that help build a sustainable world.

In essence, indicators like: degree of JIT implementation, increase of usage of recycled materials, % reduction of the carbon footprint should be on top of the executive summary not stock price, dividends and other financial indicators.

My main reason for supporting this twist is the fact that dividends and financial profit only impacts a limited number of people while the others impact the entire world. So I propose to weigh each KPI according to the global impact on humanity and in return have faith that growth will come if you have a mission and support the right things.

As usual, feedback welcomed.

Originally published at https://www.linkedin.com.