[cptskippy]

> JIT, in Lean, does not mean no buffer, it means as little of a buffer as you can get away with.

Eh... I would argue that JIT means making that buffer someone else's problem.

I was doing EDI at a logistics firm that contracted with Seagate who provided HDDs to Hitachi for their SANs around 2006. Hitachi was doing JIT for their manufacturing, Seagate however was just speculating Hitachi's demand and literally stockpiled HDDs in this firms warehouses geolocated next to Hitachi's factories.

We would pickup stock from Seagate and ship it to these warehouses where they would remain Seagate's property until Hitachi requested it, then we would simply transfer ownership to Hitachi.

Interestingly, we used rail shipping as a buffer to reduce warehouse size by sending freight on slow/cheap/indirect routes.

[Jtsummers]

In this case you have two buffers. Seagate/you have a buffer for the outflow based on expected consumption rate. Hitachi almost certainly has some buffer of their own. This is not unusual with physical goods where you have the transportation time and cost to consider (which you/your employer took advantage of).

If Hitachi couldn't consume your delivered HDDs as fast as they were delivered and anticipated any kind of delay/disruption could ever happen, they'd have some buffer of their own.

[cptskippy]

In this case Hitachi didn't have a buffered supply. The warehouses were located literally across the street. The products were palletized at Seagate's factory in quantities matching Hitachi's product lines then delivered to the warehouse in a cadence closely matching Hitachi's consumption rate. So when Hitachi placed an order, a pallet was pulled and the ownership of the serial numbers on that pallet were transferred to Hitachi as it was delivered.

The logistics firm was the buffer allowing Seagate's product rate and Hitachi's consumption to be asymmetric in nature.

[hef19898]

The last bit works, as long as the slow transportation is closely controlled. I tried it once, in the end warehouse space was cheaper.

EDIT: What you describe sounds more like VMI, vendor managed inventory, than JIT. Both require half way reliable forecasts and collaborative planning so to worl properly. Have to agree so that both solutions tend to push inventory risk to suppliers. Done correctly, overall inventory does decrease so.

[cptskippy]

JIT and VMI go hand-in-hand, they aren't mutually exclusive. Implementing JIT is to impose VMI on your suppliers.

The interesting thing was that Seagate avoided managing inventory by outsourcing to the logistics firm. The stock was technically Seagate's until it was ordered by Hitachi but the logistics company took immediate possession as pallets rolled out of the factory.

> The last bit works, as long as the slow transportation is closely controlled.

It didn't need to be controlled, just scheduled. You knew you need x units by d. The factory output n per week, so you could stagger shipments by way of different lines.

All of the inventory was tracked by serial numbers and it was interesting to watch it move because supply was often delivered to the warehouse out of order or shipments weeks apart arrived simultaneously.

[hef19898]

The way I used was VMI to avoid the limited flexibility of JIT, bit yes both concepts tackle the same problem. What you describe sounds like a lot of fun to run on a daily basis, would have loved to do that!