4 ms·

sidenote - "Lean and JIT style management of inventories" is one of the operational causes of those supply chain inefficiencies https://en.wikipedia.org/wiki/Bu

by trhway 6y ago

sidenote - "Lean and JIT style management of inventories" is one of the operational causes of those supply chain inefficiencies https://en.wikipedia.org/wiki/Bullwhip_effect#Operational_causes https://en.wikipedia.org/wiki/Bullwhip_effect#Operational_ca... . It is a classic result from the dynamic systems that improving the feedback in a given system may lead to destabilization of the system. Somehow it is lost on the proponents of Lean/JIT/etc. It is interesting how it has similarity with software development - several years ago i worked on a project that was being done under total Lean/Agile/Scrum regime. Scrum forces significant lead times into the upstream/downstream components chain(graph) like in a supply chain. As a result the whole upstream/downstream components graph relationship on that project got extremely slow (a sprint wait to get new upstream component version, try to use it in this sprint and fail because of bugs, file the bugs, the bugs get fixed the next sprint at best, while other components trying to move forward in their development ) and ultimately completely broke down after about 2 years to the point where the product couldn't even be built as not just functionality (the functionality got really lost months before that), the interfaces got completely out-of-wack without any chance of reconciliation in the setting of that process, and the product was quietly canceled soon as a result.

gowld 6y ago
It's not "lost", it's a hedging tradeoff.
- sitkack 6y ago
  Willfully ignorant of. I remember when JIT was seen as this revelation due to UPS and other shippers stream lining their processes. So this window opened up and folks were like, "we can collapse our supply chains to UPS/Fedex" ... yeah.
  - CountSessine 6y ago
    This is directly analogous to the buffer bloat problem. Smaller inventories and more responsive suppliers means better communication of intent and supply in the supply chain and therefore greater efficiency and prices. Why are advocates of big redundant inventories willfully ignorant of this? If we optimize for efficiency, we get supply disruptions every 5 years or so. If we optimize for redundancy, we suffer from higher prices all the time, and delayed availability of all new tech. I don’t know which is worse.
    - wffurr 6y ago
      Depends on the item. If it's medical supplies or food, "supply disruptions" can kill people. If it's iPhones or Christmas novelties, it's not a crisis.
      - sitkack 6y ago
        Folks keep inventories because the cost of not having X at time Y is not priced accordingly at the supplier. Digikey doesn't care or know if the 0.10$ part is going in a 10M one-off or a 4$ toy. JIT works for fungible commodities, you suddenly realize how much the cost/volume/downside ratio works when your always-on JIT capacity goes to zero. I don't want my water treatment plant to go down because a bean counter decided that spare parts are now stocked entirely by McMaster-Carr.
6gvONxR4sf7o 6y ago
Higher risk strategies are necessary in some industries super competitive industries. You play it save and your competitor takes the risk and they put you out of business before the rare event happens. If you both take the risk, then when the rare event happens you both are screwed equally and aren't out of business. Combine that with the evolution of an industry (safe players dying out) and it's another dynamical systems thing. Industries get riskier and more coupled and more efficiently tuned to normal circumstances then blow up.
marcosdumay 6y ago
Lean is quite a broad practice that goes way beyond inventory management. Also, the Lean software development methodology is very different from the Lean process management one. Anyway, yes, all those things are tools that should be used with an understanding of their positive and negative impacts (even Scrum has some positives...), not something undiscerning managers impose despite the realities of the field. And if you go read Deming, the guy that created most of what goes into Lean (production, not software development) and JIT, he has some very interesting opinions on undiscerning management.

by trhway 6y ago

gowld 6y ago

It's not "lost", it's a hedging tradeoff.

sitkack 6y ago
Willfully ignorant of. I remember when JIT was seen as this revelation due to UPS and other shippers stream lining their processes. So this window opened up and folks were like, "we can collapse our supply chains to UPS/Fedex" ... yeah.
- CountSessine 6y ago
  This is directly analogous to the buffer bloat problem. Smaller inventories and more responsive suppliers means better communication of intent and supply in the supply chain and therefore greater efficiency and prices. Why are advocates of big redundant inventories willfully ignorant of this? If we optimize for efficiency, we get supply disruptions every 5 years or so. If we optimize for redundancy, we suffer from higher prices all the time, and delayed availability of all new tech. I don’t know which is worse.
  - wffurr 6y ago
    Depends on the item. If it's medical supplies or food, "supply disruptions" can kill people. If it's iPhones or Christmas novelties, it's not a crisis.
    - sitkack 6y ago
      Folks keep inventories because the cost of not having X at time Y is not priced accordingly at the supplier. Digikey doesn't care or know if the 0.10$ part is going in a 10M one-off or a 4$ toy. JIT works for fungible commodities, you suddenly realize how much the cost/volume/downside ratio works when your always-on JIT capacity goes to zero. I don't want my water treatment plant to go down because a bean counter decided that spare parts are now stocked entirely by McMaster-Carr.

6gvONxR4sf7o 6y ago

Higher risk strategies are necessary in some industries super competitive industries. You play it save and your competitor takes the risk and they put you out of business before the rare event happens. If you both take the risk, then when the rare event happens you both are screwed equally and aren't out of business. Combine that with the evolution of an industry (safe players dying out) and it's another dynamical systems thing. Industries get riskier and more coupled and more efficiently tuned to normal circumstances then blow up.

marcosdumay 6y ago

Lean is quite a broad practice that goes way beyond inventory management. Also, the Lean software development methodology is very different from the Lean process management one. Anyway, yes, all those things are tools that should be used with an understanding of their positive and negative impacts (even Scrum has some positives...), not something undiscerning managers impose despite the realities of the field. And if you go read Deming, the guy that created most of what goes into Lean (production, not software development) and JIT, he has some very interesting opinions on undiscerning management.