Managerial and Economical Aspects of the Just-In-Time System “Lean Management in the Time of Pandemic”

Abstract

The article concerns the problem of efficiency of the Just-In-Time (JIT) system, taking into account the benefits for the company and external costs. The aim of the article was to present the conditions conducive to the effective implementation of the JIT system. The article refers to recent discussions in various publications on the effectiveness of the lean management (LM) concept and the JIT system in the context of the pandemic. It also presents the results of simulations carried out with the use of a model developed by the author concerning the transport distances at which JIT deliveries are profitable and the impact of JIT deliveries on the costs of logistics processes and external costs. The results of the conducted simulations showed in which specific cases JIT solutions were beneficial. The results showed that the scale of benefits was strongly dependent on the value of products and the scale of production. Simulations were carried out for four product groups: food products, footwear, electronics, and mobile phones. In the case of cheap products and small scale, the implementation of JIT resulted in a significant increase in the costs of logistics processes if delivery distances were not shortened. Savings of over 70% appeared in the case of expensive mobile phones, even over long distances. In the case of large-scale production and sales, large savings occurred in almost all cases (up to over 90%). Furthermore, simulations of the impact of JIT on the profitability of enterprises were also carried out using the data contained in the financial reports of listed companies. These simulations also showed a significant impact of JITs on the efficiency of companies, albeit assuming that the effect would be primarily an increase in revenues. If the current situation caused by the pandemic (disruptions in global supply chains, increased transport costs) contributes to the return of production to Europe, this may result in the creation of favorable conditions for the implementation of JIT. In this case, the result will be large savings in logistics costs, including external costs of these processes (almost 80%). Here, however, the factor contributing to the reduction in external costs would also be the scale of production and sales. The simulations carried out by the author are a novelty and constitute his contribution to scientific research in this area, as no such calculations have been carried out to date.