Just in Case (JIC)

What Is Just in Case (JIC)?

Just in case (JIC) is an inventory strategy where companies keep large inventories close by. This type of inventory management strategy expects to limit the likelihood that a product will sell out of stock. A company that utilizes this strategy commonly experiences issues foreseeing consumer demand or encounters large floods in demand at unusual times. A company rehearsing this strategy basically causes higher inventory holding costs in return for a reduction in the number of sales lost due to sold-out inventory.

How Just in Case (JIC) Works

The JIC inventory strategy varies from the later "just in time" (JIT) inventory strategy, where companies try to limit inventory costs by delivering the goods after the orders have come in.

The JIC strategy is more normal in less industrialized countries where poor transportation infrastructure, natural fiascos, poor quality control, and weakness to other providers' production issues are concerns. Such dangers in the supply chain could lead to costly production failures. Hence, a manufacturer might choose to pay for excess inventory to keep away from production closures.

For JIC, manufacturers reorder stock before it arrives at the base level to keep on selling inventory while the providers are supplying the goods. The time from when the firm reorders the stock to the time the provider gives the new stock is known as lead time. A JIC inventory system attempts to keep a base level of inventory in case of crises. JIC is ordinarily more costly than JIT in light of the fact that it can lead to squander while perhaps not the inventory is all sold and there are extra storage costs due to the extra inventory.

Why Choose the More Costly JIC Strategy?

One major justification behind rehearsing a more costly JIC system is the expected losses, like permanent loss of major customers, loss of providers, and supply-chain collapse. Assuming the JIT reaction possibilities are too sluggish or fail to keep production flowing, extra costs might be incurred. The extra costs due to keeping up with extra storage and resources might be more cost effective than utilizing a more efficient JIT system.

In a recent new development, a few companies have begun understocking their inventories on purpose. Creators of specific well known things for which purchasers are not able to acknowledge substitutes can utilize this strategy.

The "just in case" strategy is utilized by companies that have inconvenience forecasting demand. With this strategy, the companies have sufficient production material available to meet startling spikes in demand. Higher storage costs are the fundamental hindrance of this strategy.

Real World Examples of Just In Case (JIC)

An illustration of JIC purchasers are the military or medical clinics. These types of organizations must keep up with large inventories since waiting for JIT producers to increase production for required supplies might bring about lost lives and even conflicts.

Features

• Just in case (JIC) is an inventory strategy where companies keep large inventories close by.
• This strategy limits the likelihood that a product will sell out of stock.
• A company that utilizes this strategy regularly experiences issues foreseeing consumer demand or encounters large floods in demand at eccentric times.
• The fundamental hindrance of this strategy is higher storage costs and squandered inventory in the event that all stock doesn't sell.