Just-In-Time is Failing Us

In past generations, families and businesses stocked up on essentials for that “rainy day” disruption, whatever it was. There was wisdom in that kind of thinking that was overrun in our generation.

Decades of peacetime, economic prosperity, the reliability of supply chains, and the lust for greater profits led to a “just in time” mentality and practice.  Instead of stocking up on essentials, we rely on a steady influx of supplies – whatever they are – because we have gotten used to the reliability of the supply chain.

An all-too-familiar sight

Just-in-time was driven by investors and accountants who found that organizations could eke out a bit more profit through not having unused inventory on the books. This is a trap we made for ourselves because we thought that nothing would ever go wrong.

Normalcy bias is what got us into this mess. And I do say “mess,” because it’s soon going to feel like one:

  • The global semiconductor shortage is bound to worsen, particularly when China attacks Taiwan, the source of most semiconductors in the world. This will result in short supplies and higher prices of everything with chips in them – worse than we are experiencing presently. We’re about to learn just how dependent we have become on information technology.
  • The shortage of truck drivers is precipitating the shortage of “everything else” – felt by consumers and businesses.  Every one of us has experienced this personally.
  • War and changes in domestic energy policy is driving the cost of everything higher.
  • There is an acute shortage of fertilizer in the world, due to rising natural gas prices. This means that there will be less food in this harvest year, resulting in food prices skyrocketing.

The resilient supply chains that took decades to build were taken down in years, and will take years to rebuild. But the shortage of everything will make even this a difficult task.

I believe we are about to experience shortages and price hikes like the world has not seen since World War II – but it’s likely to be worse than that, because supply chains are not just local, but global.

We are living in wartime – and this is going to change everything. Too few people, including those in charge, fully understand what this means.

1 thought on “Just-In-Time is Failing Us

  1. panzrwagn

    High performance systems have a tendency towards dependency on other system components. A modern passenger car engine produces roughly 100 Hp/L of displacement and lasts well over 100,000 miles before any major service is required. A NASCAR racing engine, 200 Hp/L and has a service life of 1000 miles. A Top Fuel Dragster, 400+ Hp/L and is good for maybe 5-10 miles.

    A systems reliability is inversely proportional to its specific output. JIT systems, by their very nature, are inherently not self-sufficient, they become brittle the closer they come to maximum efficiency. Efficiency then must be tempered with reliability and resiliency requirements. Systems Architecture, Technology, Operations – and the business – must understand and balance these conflicting requirements.

    Reply

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