5 Proven Signs Your Packaging Operation Is Ready for Just-In-Time Supplies

Summary

• A just-in-time (JIT) model is a procurement strategy that replaces large inventory purchases with scheduled and demand-driven replenishment.
  
  
• Just-in-time packaging supplies can reduce your warehouse space requirements and inventory costs, but only if your operation can maintain a steady supply flow that matches your business's consumption.
  
  
• Before switching to a just-in-time inventory model, evaluate whether your business is ready for it and identify what you need to make it work successfully.
  

If your warehouse is filling up with corrugated boxes, void fill, tape, and other shipping supplies, inventory carrying costs are rising, or production schedules have become harder to predict, you're probably looking for a more flexible way to manage those materials.

Many manufacturers and distributors use just-in-time inventory management to reduce excess inventory while maintaining a reliable supply of essential packaging materials. However, JIT only works when you have the right processes, inventory visibility, and supplier support to keep materials flowing without disrupting operations.

Here's why businesses adopt JIT and five signs your packaging operation is ready to support it.

Common Business Drivers Behind Just-In-Time Packaging Supply Model

Carrying excess packaging inventory ties up your warehouse space and working capital while increasing storage and handling costs. Industry estimates suggest that storage, labor, insurance, obsolescence, and tied-up capital can drive inventory carrying costs to 20% to 30% of your average annual inventory value. For every $100,000 in unutilized packaging materials sitting on the floor, you pay an estimated $20,000 to $30,000 annually just to house, move, and manage them.

If you're finding it harder to justify keeping weeks or months of packaging supplies on hand, a just-in-time (JIT) supply model may be worth considering. Here are some of the most common reasons businesses make the switch.

• Your warehouse space is becoming constrained. Your packaging inventory takes up valuable storage space that you could use for production, finished goods, or incoming materials.
  
  
• Your inventory carrying costs are under greater scrutiny. You need to reduce inventory without disrupting production or creating supply shortages.
  
  
• Your demand has become more variable. As your production schedules become less predictable, it becomes harder to justify purchasing packaging supplies months in advance.
  
  
• You're paying for packaging that never makes it into production. Buying in bulk becomes a liability when forecasts change, SKUs get discontinued, or artwork is revised mid-cycle.

Just-in-time packaging supply may address these challenges, but it demands more from your operation upfront. Before making the switch, evaluate these five capabilities to determine whether your operation is ready for a just-in-time approach.

5 Signs Your Operation Is Ready for Just-In-Time Packaging Supply Approach

1. You Can Replenish Packaging Based on Demand

To make JIT successful, your team should determine when to replenish your packaging inventory, how much inventory to maintain based on production demand, and which inventory data to use when making those decisions.

Before you move to a JIT supply model, make sure your operation can:

• Define minimum and maximum inventory levels for every packaging supply SKU.
• Review and update production forecasts on a consistent schedule.
• Track packaging consumption by SKU or product line.
• Use the same inventory data across procurement and operations to decide what to reorder and when.

Before adopting JIT, make sure your replenishment process is supported by consistent inventory data. Frequent deliveries are most effective when every order is based on reliable replenishment signals.

2. Your Facility Can Support More Frequent Deliveries

JIT changes more than your order size. It changes how often trucks show up at your dock, how many SKUs move through receiving in a day, and how much staging space you need on any given shift. If you switch from weekly bulk deliveries to daily or twice daily deliveries, you will need to run your facility differently, even if your production volume stays the same.

Pro Tip: Before you commit to a JIT schedule, walk the path your packaging supplies take through your facility. Follow materials from the dock door through receiving, into staging, through storage, and onto the production line. Pay attention to where trucks queue, where pallets sit longer than necessary, and where your receiving team has to clear space before accepting the next delivery.

As delivery frequency increases, these areas often become your first constraints. Identify them early to give your team time to make layout and process improvements before you transition to a JIT schedule.

3. Your Supplier Choice Can Support a JIT Packaging Supply Model

Reducing on-site packaging inventory increases your dependence on supplier responsiveness.

While some packaging materials have relatively predictable demand, others, such as tapes, void fill, and protective packaging, can fluctuate based on product mix, packing methods, or daily usage. A supplier should be able to support those variations without disrupting your replenishment schedule.

Before selecting a JIT supplier, ask a few key questions. How consistent are their lead times? How do they respond when order volumes or delivery schedules change? Can they support short-notice replenishment without compromising service? If a delay does occur, how quickly do they communicate it, and what options do they provide?

A competitive price remains important when evaluating a packaging supply partner, but it should not outweigh a supplier's ability to support reliable replenishment.

4. Your Operation Has a System That Supports Cross-Functional Coordination

The success of a just-in-time packaging supply model depends on clear coordination between procurement, operations, and production. Your team should have consistent processes for sharing production updates, tracking inventory, and communicating changes that can affect your demand.

If those processes are still developing, JIT may still be a viable option with the right supplier. Look for a supplier that can assess your current operation and help you address the gaps that could affect replenishment before you transition to a JIT model.

Keep in mind that you cannot predict demand or material usage with complete accuracy. Instead, make sure you have enough visibility into your supply needs so you can adjust quickly and avoid unexpected shortages.

5. Your JIT Strategy Includes a Plan for Supply Disruptions

A JIT supply model reduces the amount of inventory you keep on site, but it should not reduce your flexibility. Production schedules change, demand shifts, and unexpected disruptions occur.

Build your supply plan so your team can adapt to these changes while keeping materials available for production.

If your organization is exploring JIT to reduce the effort required to manage packaging inventory internally, evaluate how a potential supplier helps manage these risks. Ask how they respond to demand changes, production delays, or other events that could affect replenishment. Their answers should show that they have processes in place to maintain supply instead of just delivering orders.

Assess Your Readiness

Use the checklist below to assess whether your operation is ready to support a JIT packaging supply model.

✓ We have defined minimum and maximum inventory levels for our packaging supplies.

✓ We use production forecasts and inventory data to determine when supplies should be replenished.

✓ Our receiving and warehouse processes can accommodate more frequent deliveries without disrupting operations.

✓ We have clear criteria for evaluating whether a supplier can support short-notice replenishment, consistent lead times, and changing production requirements.

✓ Procurement, operations, and production have a defined process for communicating changes that affect packaging demand.

✓ We understand how a prospective JIT supplier would respond to production changes, demand fluctuations, or other events that could affect your packaging supply.

If you checked most of these statements, you're already in a good position to support a just-in-time packaging supply model. And if you found a few gaps, use them to guide your planning and evaluate potential suppliers before making the transition!

Build a Successful Just-in-Time Packaging Program With a Supplier You Can Trust

For many manufacturers and distributors feeling squeezed by inventory, just-in-time packaging supply can be the right fit. But to succeed, you must pair your own preparation with a supplier who delivers consistently, communicates early, and helps you manage changes as they come up.

York Container can help you create a reliable packaging supply program through a combination of corrugated manufacturing expertise, supply chain support, and access to a broad network of packaging resources. Beyond custom corrugated solutions, York Container can provide you with access to nearly 200 trusted suppliers for packaging supplies and equipment.

If you are trying to determine whether a JIT packaging program makes sense for your operation, reach out to our packaging experts today!

FAQs

Q: I’m worried that if we stop storing large batches of tape, wrap, and corrugated boxes, our supplier will just hike our prices to store them for us instead. Is that what happens?

A: It’s a super common fear, but a trusted JIT partner will sync their own inventory forecasting and production runs to your schedule rather than just hoarding finished supplies for you, which still ends up saving you a ton of money on your own warehouse costs.

Q: Our production schedule changes constantly. Are we just asking for a stockout disaster on critical supplies if we try JIT?

A: JIT works best when you build flexibility into the process. Your supplier can help by keeping essential packaging materials available and staying aligned with your schedule changes so you have the support you need when demand shifts.

Q: Our receiving dock is already crazy busy. Won't more frequent deliveries of small packaging items just stress out my warehouse team?

A: It actually does the opposite if you plan it right, because smaller shipments can go straight to the packing stations instead of being logged, sorted, and buried in warehouse storage, which actually saves your team a lot of extra handling.