BSG Online Simulation Tips – The JIT Decision
If you’re a business student like me you’ve probably heard of the wonderful JIT (Just In Time) systems that exist in the world. Even the mention of a JIT system brings about the concept of an extremely efficient and highly profitable supply chain. It is no wonder that most people who play BSG think that implementing a JIT system in the game would greatly improve their chances to win.
The game’s shipping methods runs between 1-4 week delivery times. Hence 1 week delivery times represent the theoretical JIT systems that product arrives quickly and in a very timely fashion. It’s slower counterpart is the 4 week delivery time which is so the exact opposite of JIT. Most people just jump at the thought of implementing a JIT system, but there is something that most people don’t understand. Shorter delivery times require more inventory to “front” the supply chain which leads to a superficial inventory requirement to float the game’s logistics.
The question of implementing a Just in Time system becomes even more precarious when the minimum inventory requirement is actually greater than the demand shorter delivery times generates. If this is the case, then a JIT system is actually a money loser. All the shoes caught up in the supply chain at the end of the year become part of next year’s beginning inventory and their quality takes a small decrease as well as there are increased storage costs to pay off.
Ultimately a company must look at their distribution screen to fully understand if implementing a JIT system is truly worth the cost or if maybe they should choose a slightly slower delivery time despite the fact it goes against the high street opinion of JIT being the pinnacle of perfection.