08.10.2026
Just-in-Time: A Model That Remains Relevant
Reducing inventory improves performance but also increases vulnerability to unforeseen events. Discover how just-in-time operations can boost efficiency, provided you manage the risks that could disrupt the entire supply chain.
Just-in-time logistics has become a benchmark model across many industrial and distribution sectors. Limiting inventory, accelerating turnover and reducing warehousing costs are legitimate objectives in an environment where every resource tied up in inventory affects profitability. However, the disruptions observed in recent years have also highlighted the limitations of taking this approach too far. Raw material shortages, port congestion, geopolitical tensions and extreme weather events have highlighted a reality that is often underestimated: when safety margins disappear, even the smallest incident can spread throughout the entire logistics network. Today, the challenge is no longer simply to reduce inventory volumes, but to build an organisation capable of balancing economic performance with operational resilience.
Just-in-Time Logistics: Continuous Synchronisation of Operations
Just-in-time logistics involves aligning procurement, production and distribution with actual demand in order to minimise intermediate inventory. This strategy, largely inspired by the Toyota Production System and the just-in-time model, is based on a simple principle: produce only what is needed, when it is needed.
Reducing Inventory to Free Up Resources
For many companies, inventory represents a significant share of tied-up capital. According to McKinsey, an international strategy consulting firm, inventory can account for between 20% and 30% of current assets in some industrial sectors. Limiting excess inventory therefore helps reduce warehousing costs, minimise the risk of obsolescence and improve working capital requirements.
This approach explains the gradual adoption of low-inventory and just-in-time strategies across many sectors. The objective is not purely financial. It is also to accelerate the flow of goods and improve the organisation's responsiveness.
Producing at the Pace of Demand
In a synchronised flow system, deliveries arrive as close as possible to actual production requirements. Raw materials are consumed quickly and intermediate inventory is kept to a minimum.
Take an automotive manufacturer, for example. Holding several weeks' worth of components in stock represents a significant cost. Conversely, receiving these parts just a few hours before they are integrated into the production line helps minimise tied-up capital while optimising the use of industrial space.
This approach improves overall efficiency, but it requires close coordination and strong visibility across the different players in the supply chain.
The Benefits of Just-in-Time Logistics Depend on the Quality of the Logistics Organisation
The effectiveness of a just-in-time system depends less on inventory reduction alone than on the ability to coordinate all stakeholders. When deliveries, production and transport operate in sync, the economic benefits can be significant.
Reducing Costs Without Compromising Service Levels
Lower inventory levels help reduce storage, handling and inventory management costs. Companies also limit waste associated with obsolete products and excess production. In sectors such as automotive, electronics, food and beverage, and retail, this approach also makes it possible to align production more closely with actual demand. Differences between production volumes and market requirements can therefore be identified and corrected more quickly.
Reducing Production Lead Times
A well-managed organisation reduces waiting times between the different stages of production. Deliveries are synchronised with actual requirements and production cycles are better controlled.
This approach is particularly effective when suppliers, industrial sites and logistics providers share the same operational data and work according to common planning rules.
Using Data to Manage Flows
Just-in-time operations now rely heavily on digital tools. Inventory management systems, Warehouse Management Systems (WMS) and control platforms improve the monitoring of goods, inventory levels and available capacity.
These tools make it easier to anticipate shortages and coordinate the different stakeholders. Above all, they enable companies to quickly identify discrepancies between forecasts and actual demand and adjust operations before a stockout or excess inventory occurs.
The Limitations Become Apparent as Soon as One Link Slows Down
The benefits of just-in-time logistics depend on a delicate balance. When one of the stakeholders can no longer maintain the expected pace, the consequences can quickly become significant.
A Supply Disruption Can Bring an Entire Production Chain to a Halt
The main weakness of the system lies in its dependence on the continuity of deliveries. A shortage, supplier delay or logistics disruption can bring operations to a standstill.
According to McKinsey, more than 90% of companies worldwide have experienced a significant supply chain disruption in recent years. This reality explains why many companies are now reintroducing strategic inventory for certain critical products.
The automotive industry is a perfect illustration of this vulnerability. Between 2020 and 2023, the global semiconductor shortage forced many manufacturers to slow down or temporarily halt production due to a lack of components that were relatively small and inexpensive. This episode demonstrated that a failure involving a single component could disrupt an entire production chain operating on a just-in-time basis.
Transport Becomes a Critical Performance Factor
In a just-in-time strategy, transport reliability directly affects operational continuity. A delay in a road transport operation can prevent a factory from receiving its components on time. Conversely, air freight can sometimes secure a critical supply when the cost of a disruption becomes higher than the cost of transportation itself.
International strategies must also take maritime freight constraints into account, as it is particularly exposed to port congestion, geopolitical tensions and weather-related disruptions.
Zero Inventory Is No Longer Always the Objective
The COVID-19 pandemic, the global semiconductor shortage, port congestion and disruptions in the Red Sea have shown that pursuing absolute zero inventory can increase companies' vulnerability. The question is no longer whether to eliminate all inventory, but rather to determine which products require safety stock and which can be managed on a just-in-time basis. Today, the most successful companies are looking to find the right inventory level rather than systematically reducing it.
How Can Companies Secure a Just-in-Time Strategy Today?
The success of a just-in-time strategy now depends on the ability to absorb disruptions without compromising operational continuity. Supplier delays, raw material shortages, port congestion or carrier unavailability can quickly disrupt operations when no safety margin has been built in.
Identify the Flows That Are Truly Critical
Not all products present the same level of risk to operations. Components whose absence can halt a production line, raw materials with long lead times or products exposed to significant supply pressures generally require a different approach from the rest of the portfolio.
In the automotive industry, for example, a low-value electronic component can bring an entire production line to a standstill if it is not available at the right time. In the food industry, the supply of cereals, oilseeds and certain plant-based raw materials remains highly dependent on weather conditions and international markets. The challenge is therefore to identify the products whose absence would have the greatest operational and financial impact, and then adapt inventory levels and risk-mitigation measures accordingly.
This analysis makes it possible to focus efforts on genuinely strategic products rather than applying a uniform policy across all supplies.
Adapt Transport Solutions to Operational Requirements
In a just-in-time organisation, transport is not simply an execution step. It becomes a critical link in securing production and deliveries. The choice of transport mode directly affects a company's ability to meet deadlines, absorb disruptions and maintain operational continuity.
Rail freight, for example, makes it possible to consolidate certain flows while reducing the carbon footprint. Multimodal transport provides greater flexibility by combining several transport modes according to cost, lead-time and capacity constraints.
Pallet transport also plays an essential role in regional and national distribution networks, where delivery frequency directly affects the reliability of just-in-time flows.
Strengthen Visibility Across the Entire Supply Chain
An effective just-in-time strategy relies on the quality of the information available. Forecasts, inventory levels, supplier lead times, transport capacity and exceptional events must be monitored in real time. The greater the level of visibility, the more time companies have to react before a disruption turns into a supply shortage.
Just-in-Time Logistics: Finding the Right Balance Between Performance and Resilience
Just-in-time logistics remains one of the most effective logistics strategies for reducing costs and improving the turnover of goods. However, seeking to minimise inventory without securing deliveries often means shifting the risk rather than eliminating it. Before further adjusting your inventory levels, make sure your suppliers, transport capacity and management tools are capable of absorbing disruptions without compromising your operations.
This is precisely where GEODIS supports its customers in finding the right balance between performance and resilience, combining logistics expertise, operational visibility and transport solutions tailored to the specific constraints of each supply chain.
Talk to GEODIS experts to build a high-performing, secure just-in-time strategy tailored to your operational requirements.