7 ms·

I remember in the late 90s when the place I worked at was all about JIT. Not compiling, but physical stock - having the items they needed just as they were nee

I remember in the late 90s when the place I worked at was all about JIT. Not compiling, but physical stock - having the items they needed just as they were needed. This was the Physical Plant for a large university campus, so considerable money was involved in storing and shipping goods. The execs were delighted with the idea of saving money. The grizzled workers just raised an eyebrow, made a few passive-aggressive comments about how, in their day, having the last box of something used because it was needed with no backup was considered a disaster waiting to happen, then shrugged and did as they were asked. I left before I saw how it played out, but I suspect that there was some good trimming of backlogs and storage of materials that really could afford to wait, but far too many cases where JIT wasn't IT enough. It's like...creating a breeding ground for Black Swans. The article made me think of that - high efficiency all the time means little-to-no-buffer for unusual needs.

genghisjahn 8y ago
This is an interesting article from 2002 about Dell and their JIT process. Compaq is mentioned as an aside, but Compaq is a good comparison of what can happen when you have too much inventory on hand. https://www.chicagotribune.com/news/ct-xpm-2002-07-29-0207290012-story.html https://www.chicagotribune.com/news/ct-xpm-2002-07-29-020729...
- ergothus 8y ago
  > If the company receives orders for an unusually large number of a component, such as a certain kind of Pentium 4 chip, Dell goes on red alert, rushing to wring out emergency shipments from suppliers. > If the components are selling too fast, executives can instruct Dell's Web site administrators to offer customers a deal--a discount on a better component or, in dire emergencies, a free upgrade. These are the vital parts - if you have no buffer to handle irregularities, how do you handle them? In Dell's case, it's (presumably) paying extra to get emergency shipments and losing some revenue via discounts to adjust demand, and those situational costs are (presumably) worth the general case improvement. If the math works, great! Neat! Inspirational, even. I think some people were inspired who didn't consider the math for their industries though.
  - bluGill 8y ago
    I didn't read the link, but JIT done right means you figure out what kind of buffer you need and keep that as small as possible but no smaller. Dell keeps a buffer, just not a large one. Yes Dell sometimes loses by having to pay extra for emergency orders. However sometimes the alternative loses from having parts in the warehouse nobody wants that have to be disposed of.
  - wil421 8y ago
    The article OP posted was from 2002 and as of 2018 it looks like Dell is still using JIT methods. Looks like the math was right.
peteradio 8y ago
That's great. This probably wasn't the first dumb thing the execs asked them to do.
- ergothus 8y ago
  I do have a story about how many mid-level managers met weekly for months to develop a "more efficient" order-of-tasks for janitors to clean the bathrooms. They claimed the new process would save $100,000 over 3 year (IIRC). Reading the fine print found that they also transition to transparent sandpaper as toilet paper, which accounted for most of their savings. I never got to ask a janitor, but I'm pretty sure I can guess the respect the idea of a "do these tasks in this order" coming from people that had never done the job would get.
  - itronitron 8y ago
    there's a good chance they were put on that task in order to keep them from improving efficiency in other areas
matchagaucho 8y ago
Shouldn't an efficient JIT process define an ideal inventory quantity level that triggers restocking? "Qty=1" is definitely inefficient.
- ergothus 8y ago
  I think people are taking me way too literally here - Your company uses toilet paper in the bathroom. No one suggests that you have no extra toilet paper on hand. Instead, someone says "we use 3 rolls/week on average" Dumb person: "So let's never have more than 3 rolls spare" Better: "While 3 is the average, 5 covers 80% of the weeks. The remaining weeks can be covered by having John run down to the corner store to grab an extra." (Note: ASSUMING someone has done the math and decides the opportunity cost of storage is greater than the opportunity cost of those 20% of times) My concern: Joan's retirement party serves bad tuna casserole on the same day the corner store is out of stock. JIT can totally work - wasting money on storage on something that might be wasted can be an easy win. But you have to consider the other cases. To tie this back to the article, if you're operating at capacity all the time, what happens when something comes up and you need more capacity?
  - mattmanser 8y ago
    Until the week there's a national toilet roll shortage and you have to shut the office for a week because you don't have any toilet roll and lose $100,000s. Both our examples are glib, but it's very easy for JIT to turn in to a "penny wise, pound foolish" scenario, where you're saving small amounts of money, but occasionally losing big amounts of it because of those savings.
- itronitron 8y ago
  Yes, and universities in particular have a level of responsibility to their customers that is much higher than other organizations.
- FakeComments 8y ago
  My local grocery store switched to JIT stocking of shelves: they’re now perennially out of 1 in 10 basics, and I just shop online. Amazon Fresh can routinely be out of things too, but at least they don’t waste my time doing it. The only value in a grocery store was that it was a warehouse of food stocks that smoothed out the irregularities suppliers face. If I have to deal with supplier problems because they JIT stock, I may as well just get deliveries directly from suppliers. You can’t “JIT” when your entire value is supply smoothing, because you’re increasing the failure modes of your core business for tangential benefits. People keep showing me math that says it works, and places keep trying it, but I’ve yet to see it do anything but significantly damage their core business for questionable benefit.
rossdavidh 8y ago
I worked in manufacturing (semiconductors) just long enough to see JIT go out of fashion, and get replaced by bottleneck optimization. The idea is that you distinguish between those cases where it's ok to have extra stock (because it's cheap, durable, and not bulky), and those where it's not. Then, you have a small number of bottlenecks that you have to watch like a hawk, because having extra capacity there would be expensive. You can react quickly to problems at a bottleneck, because your attention is always there, but most of the items you don't try keep the least possible inventory. It was a sort of optimized compromise between the older system (lots of extra stock for all steps) and JIT (minimal stock for all steps).

genghisjahn 8y ago

This is an interesting article from 2002 about Dell and their JIT process. Compaq is mentioned as an aside, but Compaq is a good comparison of what can happen when you have too much inventory on hand. https://www.chicagotribune.com/news/ct-xpm-2002-07-29-0207290012-story.html https://www.chicagotribune.com/news/ct-xpm-2002-07-29-020729...

ergothus 8y ago
> If the company receives orders for an unusually large number of a component, such as a certain kind of Pentium 4 chip, Dell goes on red alert, rushing to wring out emergency shipments from suppliers. > If the components are selling too fast, executives can instruct Dell's Web site administrators to offer customers a deal--a discount on a better component or, in dire emergencies, a free upgrade. These are the vital parts - if you have no buffer to handle irregularities, how do you handle them? In Dell's case, it's (presumably) paying extra to get emergency shipments and losing some revenue via discounts to adjust demand, and those situational costs are (presumably) worth the general case improvement. If the math works, great! Neat! Inspirational, even. I think some people were inspired who didn't consider the math for their industries though.
- bluGill 8y ago
  I didn't read the link, but JIT done right means you figure out what kind of buffer you need and keep that as small as possible but no smaller. Dell keeps a buffer, just not a large one. Yes Dell sometimes loses by having to pay extra for emergency orders. However sometimes the alternative loses from having parts in the warehouse nobody wants that have to be disposed of.
- wil421 8y ago
  The article OP posted was from 2002 and as of 2018 it looks like Dell is still using JIT methods. Looks like the math was right.

peteradio 8y ago

That's great. This probably wasn't the first dumb thing the execs asked them to do.

ergothus 8y ago
I do have a story about how many mid-level managers met weekly for months to develop a "more efficient" order-of-tasks for janitors to clean the bathrooms. They claimed the new process would save $100,000 over 3 year (IIRC). Reading the fine print found that they also transition to transparent sandpaper as toilet paper, which accounted for most of their savings. I never got to ask a janitor, but I'm pretty sure I can guess the respect the idea of a "do these tasks in this order" coming from people that had never done the job would get.
- itronitron 8y ago
  there's a good chance they were put on that task in order to keep them from improving efficiency in other areas

matchagaucho 8y ago

Shouldn't an efficient JIT process define an ideal inventory quantity level that triggers restocking? "Qty=1" is definitely inefficient.

ergothus 8y ago
I think people are taking me way too literally here - Your company uses toilet paper in the bathroom. No one suggests that you have no extra toilet paper on hand. Instead, someone says "we use 3 rolls/week on average" Dumb person: "So let's never have more than 3 rolls spare" Better: "While 3 is the average, 5 covers 80% of the weeks. The remaining weeks can be covered by having John run down to the corner store to grab an extra." (Note: ASSUMING someone has done the math and decides the opportunity cost of storage is greater than the opportunity cost of those 20% of times) My concern: Joan's retirement party serves bad tuna casserole on the same day the corner store is out of stock. JIT can totally work - wasting money on storage on something that might be wasted can be an easy win. But you have to consider the other cases. To tie this back to the article, if you're operating at capacity all the time, what happens when something comes up and you need more capacity?
- mattmanser 8y ago
  Until the week there's a national toilet roll shortage and you have to shut the office for a week because you don't have any toilet roll and lose $100,000s. Both our examples are glib, but it's very easy for JIT to turn in to a "penny wise, pound foolish" scenario, where you're saving small amounts of money, but occasionally losing big amounts of it because of those savings.
itronitron 8y ago
Yes, and universities in particular have a level of responsibility to their customers that is much higher than other organizations.
FakeComments 8y ago
My local grocery store switched to JIT stocking of shelves: they’re now perennially out of 1 in 10 basics, and I just shop online. Amazon Fresh can routinely be out of things too, but at least they don’t waste my time doing it. The only value in a grocery store was that it was a warehouse of food stocks that smoothed out the irregularities suppliers face. If I have to deal with supplier problems because they JIT stock, I may as well just get deliveries directly from suppliers. You can’t “JIT” when your entire value is supply smoothing, because you’re increasing the failure modes of your core business for tangential benefits. People keep showing me math that says it works, and places keep trying it, but I’ve yet to see it do anything but significantly damage their core business for questionable benefit.

rossdavidh 8y ago

I worked in manufacturing (semiconductors) just long enough to see JIT go out of fashion, and get replaced by bottleneck optimization. The idea is that you distinguish between those cases where it's ok to have extra stock (because it's cheap, durable, and not bulky), and those where it's not. Then, you have a small number of bottlenecks that you have to watch like a hawk, because having extra capacity there would be expensive. You can react quickly to problems at a bottleneck, because your attention is always there, but most of the items you don't try keep the least possible inventory. It was a sort of optimized compromise between the older system (lots of extra stock for all steps) and JIT (minimal stock for all steps).