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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
by 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 agoUntil 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.