What is the main difference between JIT procurement and traditional procurement mode in supply chain environment?

(1) Compared with traditional procurement, JIT procurement has great differences in the number of suppliers. JIT procurement generally uses fewer suppliers or even single source supply: when fewer suppliers or single source supply is used, the management of suppliers is more convenient, and suppliers can obtain long-term orders from their own enterprises, thus reducing the cost of raw materials and purchased parts, which is conducive to reducing costs. On the other hand, single-source supply can strengthen the cooperative relationship between manufacturers and suppliers, and fully guarantee the quality of purchased raw materials and purchased parts. However, when enterprises adopt single source supply, there are also some shortcomings. In single-source supply, enterprises cannot obtain competitive prices from suppliers, which will lead to excessive dependence on suppliers. Therefore, when I implement JIT procurement, it is best to give priority to one supplier, supplemented by another supplier.

(2) JIT procurement adopts small batch procurement compared with general traditional procurement: in JIT procurement, its core concept is to eliminate the inventory of raw materials and purchased parts. In order to ensure the timely and high-quality supply of raw materials and purchased parts, the procurement must be in small batches. However, small batch purchase will inevitably increase the number of transportation times and transportation costs, especially for suppliers with long space distance. It is relatively difficult to implement JIT procurement under such conditions. There are four ways to solve this difficulty. One is to shorten the geographical distance between manufacturers and suppliers. Second, the supplier establishes a transit warehouse near the manufacturer; Third, specialized third-party logistics enterprises are responsible for distribution; Fourth, let suppliers be responsible for a variety of raw materials and purchased parts.

(3) JIT procurement is different from traditional procurement in terms of supplier selection criteria: in the traditional procurement mode, the price competition strategy is basically implemented, and the relationship between suppliers and users is short-term. However, under JIT procurement mode, it is necessary to comprehensively evaluate suppliers in many aspects, and there is also a unified scale in evaluation standards.

(4) JIT procurement greatly strengthens information exchange: As mentioned above, in JIT procurement mode, small batch and multi-frequency procurement are generally adopted, which requires that information between suppliers and manufacturers must be highly shared to ensure the accuracy and real-time performance of supply and demand information. The contents of information exchange include production plan, engineering data, quality, cost and delivery date.