Timely no longer timely: liquidity strategy

admin2 days ago

0 0 3 minutes read

Timely no longer timely: liquidity strategy

JIT: Gold Standard…until not

For many years, real-time (JIT) has been the holy grail of operational efficiency. The idea is simple: keep inventory lean, reduce overhead and receive items only as needed to meet demand. It is a system for predictability, and it works in a relatively stable globalized economy.

JIT helps businesses stay agile and profitable by minimizing storage costs and avoiding bundling capital into unused stocks. For manufacturers, retailers and distributors, gaining an advantage means inventory and more precise timing throughout the supply chain.

But then the system ruptured.

The pandemic has changed the game. Port backup. Export restrictions have begun. Key suppliers close or hoard stocks. Suddenly, companies with lean lists scramble to meet orders, meet demands and explain delays to customers.

The vulnerability of JIT is no longer theoretical. They flashed red in the backlog, margin hits and lost income.

For many, this destruction not only reveals weaknesses in inventory management. It reveals a wider range of vulnerabilities in how businesses manage time, liquidity and control.

Because in the real world, inventory strategy and liquidity management are two aspects of the same coin. When one staggers, the other must remain.

Predictability (and other artifacts from the past)

So far, most business leaders know that the term “timely” doesn’t mean “on-time” – no longer.

However, many are still running operations and cash flow strategies, as if they were stable. It seems that the next cargo will land as planned. It seems like pricing fluctuations, delivery time peaks and supplier restrictions are temporary damage rather than structural risks.

Even the shift to “in-case” inventory is not fully accepted. Businesses may hold more products, but usually at the expense of liquidity. Others are totally reluctant to stock, fearing that they will freeze cash on the shelves rather than flow. (As if all of this is not enough, the new tariff threat is reintroducing huge cost uncertainty – 10% to 90% of critical import increases may be unannounced.)

Having weathered the recent supply chain storm and prepared for brewing businesses, this is a key combination: Strategic link between inventory selection and liquidity management. Because it’s not just how much you carry, when you carry it, but how you raise money for what you carry, and how to move when timing is crucial.

Here is the real lesson from the past few years: Efficiency – Flexibility = Exposure.

From margin squeeze to missed opportunities, exposure will spiral quickly.

Liquidity is the new buffer: fund your inventory without the need to bundle cash

If Jit teaches business operations more lean, they have taught them to be smarter in recent years.

This does not mean waving the opposite extreme and storing blindly. This means building financial flexibility into your inventory strategy – so you can act early, move confidently and keep the liquid.

This is something many businesses don’t realize:

You don’t have to choose between protecting profits and retaining cash.

You can provide funds Both.

At this moment, tools such as inventory financing, elastic lines and cash flow funds were established. When product costs rise, delivery schedules are unpredictable and tariffs may soar with policy changes, you need to choose to buy it before without freezing working capital. Here are how each approach supports smarter liquidity management:

Inventory financing