A number of blog posts, such as this one, have been popping up lately casting doubts on whether just in time manufacturing can survive post-coronavirus.
They share some pretty strong words:
Recent trade tensions between the US and China, as well as the COVID-19 pandemic, have highlighted that this supply chain model is increasingly untenable.
Listen to this episode of the podcast to hear my take…
Examining whether just in time manufacturing is truly dead
Are JIT supply chains resilient enough to survive shocks like the pandemic, when success revolves around the ability to move components and goods across vast distances very quickly?
I share my thoughts on this and why many people have got the wrong idea about JIT in the first place.
Listen to this episode of the podcast right here 👇👇👇
In summary, we cover the following in this episode:
- Defining what JIT is with some clear examples – there is a market need and you can supply it ‘just in time’ and make all of the decisions behind the production and fulfilment as close as possible to the time of consumption
- The drawbacks of keeping inventory, which is a key goal of JIT’s to eliminate
- When a longer supply chain is NOT a very bad thing for a certain product type
- 3 benefits of JIT: lower working capital, ability to be more responsive to the market by accelerating production of good sellers rapidly, and the ability to cut losses on poor sellers and halt production quickly in order not to hold stock of them
- Why JIT is better with a short supply chain which is geographically co-located and where processing times are short
- How you’re not doing ‘just-in-time’ if your supply chain has other notes (upstream of downstream of you) holding a lot of inventory
- Why long supply chains create risks rather than being ‘too just in time’ – having key suppliers far away isn’t really compatible with ‘true’ JIT and an example is losing Chinese suppliers due to their COVID lockdown and then running out of stock
- The chances of getting ‘back to normal’ with globalized supply chains that are not very JIT
- Why the US/China trade war is likely to be a catalyst for US companies to restructure their supply chains
“What else can I read about JIT?”
I further discussed my feelings about ‘blaming’ just in time manufacturing for material shortages during the peak of the pandemic in this blog post:
Where do you stand on JIT? Is your supply chain structured to be just in time? Have you had trouble like delays due to this recently? Let me know, please, by leaving a comment.
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