Just-in-time and disasters


See on Scoop.itlean manufacturing

Every time a natural or human-made disaster occurs, there are journalists and bloggers to see in the resulting supply chain disruption evidence that just-in-time (JIT) is wrong and should be abandoned as an objective.

This is based primarily on the perception that JIT means zero inventories. Since zero inventories means zero production, it is obvious that not all inventory is waste. What is waste is unnecessary inventory, which is a bit more subtle because it requires you to tell what is necessary from what is not. There are telltale signs, like thickness of dust or the inability of anyone to tell you what materials are for, but that is the easy part. Beyond that, you have to figure out experimentally what you really need.

What JIT really is about is protecting yourself against shortages by vigilance rather than inventory. This means keeping accurate inventory data, monitoring the in- and out-flows, monitoring the disruptions that can be anticipated, and responding quickly to events. The reason to pursue this strategy is that , while protecting yourself against shortages by inventories works with crude oil, it does not when you are dealing with thousands of items. If you try, you end up with full warehouses that happen not to contain the item you need today.

When a disaster hits your supply chain, the quick response cannot be yours alone. You need your suppliers’ help, and that is why you cannot be in adversarial relationships with them. Long-term, single-source agreements, the regular exchange of business and technical information, and collaborative problem-solving are all necessary to cement the relationships that make a joint emergency response possible.

See on blog.kinaxis.com