JIT or WOP

I recently worked with a client concerned about their procurement practices and the desire to delay procuring items until they were needed or a "Just in Time". The problem was they had no real measurement controls on their supplier base, no supplier history on on-time delivery, no rejection rates on material received, etc. etc. The company was an engineered to order, build to order custom equipment provider. The held very little inventory and ordered roughly 85% of everything needed on a job by job basis. Unfortunately the outcome was the opposite of the intended reduction DSO of cash flow. Instead of the items arriving Just in Time the arrived just a few days late but several suppliers had rejected material which drove out the amount of time the investment in WIP was carried moved from 4 - 4 1/2 weeks to 7 - 8 1/2 weeks almost doubling the amount of time the cash was tied up in non-billable inventory. Just in Time became Waiting on Parts! The lesson....... make sure your systems support and validate the goals behind any new program before undertaking it. And if you are not doing something to measure the process and the impact of the changes you should always expect untoward results.