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 Business Strategy Game or 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.

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