Despite dominating supply chains for years, lean practices are starting to come under question in many organisations. Now that there’s more attention on disruptions, the difference between just-in-time and just-in-case logistics deserves more scrutiny. It may be time to move past a strategy built solely on pure efficiency and embrace higher costs but added flexibility.

Key Differences Between Just-in-Time and Just-in-Case

Before diving into which strategy is best, it’s important to distinguish between them. There are a few key differences between just-in-time and just-in-case approaches organisations must understand to make the right choice.

Inventory Practices

The biggest difference between these two strategies is how they approach inventory. Just-in-time (JIT) minimises on-hand stocks at any given time by only holding what a facility needs in the short term. Then, it replenishes stocks as needed after depleting current levels.

Just-in-case (JIC) holds larger safety stocks, aiming to keep more on hand than necessary to minimise the effects of disruption. It’s also becoming increasingly popular, as inventories saw a sharp increase after the COVID-19 pandemic across multiple industries.

Supply Chain Management

Maintaining these distinct inventory practices also requires different approaches to supply chain management. JIT logistics requires closer collaboration with suppliers and logistics providers, as quicker reactions and fulfilment times are necessary to prevent shortages with no safety stocks.

By contrast, JIC methods don’t require as much agility in their sourcing and logistics. Instead, they often focus on long-term reliability and distributed sourcing to ensure they can maintain larger stock levels, even if that means longer lead times.

Primary Goals

The final key difference between just-in-time and just-in-case philosophies is their ultimate goal. JIT logistics is all about efficiency. By minimising dead inventory and streamlining logistics, they keep operating costs and lead times as low as possible — reducing logistics costs by nearly 80% in some cases.

JIC is less concerned with operational efficiency and more concerned with resilience. The goal is to withstand incoming disruptions and prevent stock-outs to ensure consistency despite changing circumstances.

JIT Logistics Pros and Cons

Just-in-time approaches have been the standard for years now and it’s easy to see why. Warehousing rents have skyrocketed since 2020, so minimising the inventory space a company needs can dramatically reduce costs. It also prevents losses from storage-related concerns like spoilage as it enables faster inventory turnover.

JIT practices also let businesses adapt to demand fluctuations more efficiently. Inventory changeovers or stocking adjustments don’t take as much time when there’s less on hand to get rid of.

As a tradeoff, JIT logistics is highly prone to supply-side disruption. The lack of safety stocks means any delay or other issue with suppliers could create negative ripple effects throughout the supply chain. Many organisations experienced this issue firsthand amid the COVID-19 pandemic.

Maintaining these methods can also be challenging. Many businesses lack visibility beyond first-tier suppliers, making the quick restocking that JIT requires rather difficult.

JIC Logistics Pros and Cons

Just-in-case inventory examples have inverse benefits and downsides. Their biggest advantage is their resilience, as sudden disruptions are less impactful when facilities have enough stock to support them through shortages and shifts.

This reliability can produce long-term savings. The U.K. loses over £12 million annually to lost revenue from supply chain disruptions. Weathering that storm shrinks that figure and can improve relationships with customers.

The biggest downside to JIC logistics is its upfront costs. Holding more inventory is expensive. Unoptimised logistics loads can also lead to higher fuel costs. When something as simple as an empty roof rack can increase fuel consumption by 30%, half-loaded shipments suddenly become comparatively pricey.

Just-in-case approaches can also create problems related to dead inventory. These include spoilage of limited-shelf-life goods and losses from demand shifts.

Just-in-Time vs. Just-in-Case: Which Is Best?

Given these differences between just-in-time and just-in-case logistics, it’s hard to say if one is strictly better than the other. In many cases, the best solution is to adopt a hybrid strategy, applying JIT and JIC to different products under the same company.

Low-volume but high-volatility products typically benefit more from JIC strategies, whereas JIT logistics is better for high-volume, low-volatility ones. Determining which inventory items fall best under each method is key to balancing costs and long-term reliability across an organisation.

Some industries fall more heavily into one side over the other, making a single strategy worthwhile. High-end electronics manufacturing, for example, should embrace JIC over JIT across the board. There are just 25 semiconductor fabs in the U.K. — not enough to sustain demand domestically — and many other critical components and resources come from international, disruption-prone sources. JIT provides needed resilience.

By contrast, many simpler consumer packaged goods can operate on a purely JIT model. Demand shifts may vary in this industry, but supply-side disruptions and cost fluctuations are less common.

Choose the Right Logistics Approach for Your Business

There are plenty of just-in-time and just-in-case inventory examples across industries today. Each strategy delivers unique benefits and disadvantages.

The best logistics approach depends on the specific market and supply chain conditions in question. Understanding the differences between these methods is key to choosing the best option or mix of options.

Emily Newton