The Latin American logistics landscape is undergoing a dramatic transformation. Have you ever wondered why many companies are radically changing their approach to inventory management? The answer lies in the global challenges that have shaken our traditional supply chains.
For years, we relied on the Just in Time (JIT) model, a strategy that allowed us to maintain minimal inventories and maximize efficiency. However, the pandemic, the container crisis and geopolitical tensions have tested our ability to maintain cargo integrity under controlled conditions.
This new reality has taught us a valuable lesson: resilience is no longer optional, it is essential to ensure the continuity of our business in Latin America. (Article - The Logistics World)
The Just in Time system, born in Japan and brought to excellence by Toyota, revolutionized the way we manage inventories. This approach, based on receiving materials just when we need them, has allowed us for decades to minimize costs and optimize operations.
Why have so many Latin American companies opted for JIT? The benefits speak for themselves:
However, "During the pandemic, we discovered that our JIT system, which had saved us millions in inventory costs, became our Achilles heel. It took just one week's delay at the ports for our production to come to a complete standstill."
This experience reflects the limitations of the model in our regional context:
Imagine being able to keep your operation running without interruption even during global crises. This is precisely the purpose of the Just in Case (JIC) model. Unlike JIT, the JIC approach prioritizes your operational peace of mind through strategic inventories that act as your safety net against the unexpected.
Eduardo Ramirez, supply chain manager for a Colombian retail chain, shares, "We increased our safety inventories on technology products from 15 to 45 days. The additional warehousing cost was more than offset by keeping our stores stocked while competitors faced empty shelves." (Article - The Logistics World)
The impact of the transition in our region
The adoption of Just in Case is changing the logistics landscape, especially in key industries such as automotive, technology and retail. This transformation has triggered significant changes in the way we operate:
To implement a Just in Case model without skyrocketing your costs, consider these practical recommendations:
The case of Farmacéutica Central Latinoamericana is particularly inspiring. After losing $1.2 million to stock-outs during the pandemic, they redesigned their logistics strategy. "We implemented a hybrid model with JIC warehousing for critical drugs and imported supplies, while maintaining JIT for high-turnover, low-criticality products. The result was amazing: we improved our product availability from 82% to 97%, while reducing our total logistics costs by 8%," shares its COO.
Having a partner like Solistica can make the difference between a successful transition and a costly learning curve. As a leading provider of 3PL (Third-Party Logistics) solutions in Latin America, Solistica offers the experience and capacity to adapt your supply chain to this new paradigm in an agile and efficient way.
Solistica, as a specialized logistics partner, offers you:
Companies that implement 3PL solutions with Solistica experience dramatic improvements in their responsiveness to market disruptions, positioning themselves in a competitive environment. Their customized approach ensures that each solution is perfectly adapted to the specific challenges of your industry.
The transition from Just in Time to Just in Case represents a necessary evolution in the way we face a volatile world. Latin American companies that achieve the right balance between efficiency and resilience will not only survive future crises, but will also find opportunities to grow and consolidate in global markets. (Blog - Solistica)
Contact our team today and take the first step towards truly resilient logistics!