JIT relies on other elements in the inventory chain as well. For instance, its effective application cannot be independent of other key components of a lean manufacturing system or it can “end up with the opposite of the desired result.” In recent years manufacturers have continued to try to hone forecasting methods such as applying a trailing 13-week average as a better predictor for JIT planning; however, some research demonstrates that basing JIT on the presumption of stability is inherently flawed.
JIT concept has been extended to across the supply chain to encompass all stakeholders. ECR (Efficient Consumer Response) is a strategy to increase the level of services to consumers through close cooperation among retailers, wholesalers, and manufacturers. By aiming to improve the efficiency of a supply chain as a whole beyond the wall of retailers, wholesalers, and manufacturers, they can consequently gain larger profits than each of them pursuing their own business goals. Companies who compose the supply chain can reduce the opportunity loss, inventory level, and entire cost, as well as increase monetary profitability by sharing the purpose of customer satisfaction. The goal was to reduce the costs to the consumer by changing the way product flowed from manufacturers to retailers. The order flow, at the time, was driven by the manufacturers, not by consumer demand.
ECR is a strategic concept compiled by a consulting firm Kurt Simon Associates at the request of organizations concerning the U.S. processed food distribution industry, aiming to recover the competitive strength for surviving the turbulent time of the industry when discounters emerged in the U.S.
JIT plays an important role as it is applied in close coordination with suppliers maximizing the relationship between production and sales levels with inventory, reducing carrying costs. JIT is linked with a computerized Point-Of-Sale System and inventory levels are maintained through an automated reordering system connected to suppliers, so that stock outs are minimized.
