5 ms·

OK, everyone, the ship's refloated, yoohoo! Now we can go back to Just In Time inventory, because there's nothing whatsoever that can go wrong now!

tome 6y ago
I seem to recall that as originally conceived in the Toyota Production System, suppliers of Just In Time inventory were supposed to be sited in the same location as you. I wasn't able to find a reference for this though ...
- cptskippy 6y ago
  When I was working with a logistics firm who did JIT for Seagate/Hitachi, the warehouse was across the street from Hitachi and they could handtruck deliver hard drives if need be.
- rtkwe 6y ago
  Even that probably wouldn’t save you from an event like this if you’re in Europe because your supplier’s supplier (or your supplier’s supplier’s supplier, you get the gist) probably sends things through the Suez.
- Jenk 6y ago
  Yes, JIT inventory meant delivered "from the warehouse to the workstation" and not "intercontinentally shipped with extremely slim margins." But that's not what has happened here. Continually increasing demand (read population growth + geo-conglomeration of industries) has stretched the global supply network(s) to fragility, necessitating JIT in absurd distances and quantities, in turn requiring ships 400mx50m to squeeze through canals they barely clear the bed of at speeds slow enough for them to not cause over-swell but not fast enough for them to have enough thrust to overcome crosswinds.
  - ckdarby 6y ago
    Sounds like an opportunity for the country to start on another canal. They'll be able to take advantage of the clear demand, solve the issues of the existing, have a redundancy plan if either canal has an issue or needs repairs and I don't think it'll have a hard time getting support considering everything going on at the moment.
- brightball 6y ago
  If I remember correctly, one of the early bits of hype around Dell was basically having all of their suppliers right there next to them.
- bluGill 6y ago
  They don't have to be in the same location. However the farther you are from the site of production the more product needed in queue. Toyota stocks the parts bin on the assembly line from a warehouse on site. The warehouse is stocked less often than the parts bins. Depending on how long it takes to get an order the warehouse has more of some parts than others. Toyota also has extra parts as risk management where they determine that there is a high risk of the part not being available to order. Toyota also shares their order predictions with suppliers well in advance so the supplier can plan ahead what they need to deliver. Toyota also knows their supply chain 6+ level deep, if mine workers go on strike they prepare backup plans for 6 months out. Toyota also does a lot of other things that I'm not aware of to ensure that when they need something it arrives, not a moment sooner or latter. Toyota isn't the only company that does this. If you supply Toyota they require you to do this in some form, including making your suppliers do it. (this is part of knowing their suppliers 6 levels deep - something they also do to ensure they don't use slave/child labor even indirectly). There are other companies that don't supply Toyota that have also taken this same lesson. The point is just in time is hard to do right. The simple elevator pitch has many obvious problems that those who do it are careful about ensuring they don't happen.
- Scoundreller 6y ago
  Too bad so many automakers failed to understand that continuous delivery means continuous purchasing. You cannot just stop buying your chips for a year and then complain when manufacturers re-tooled around you.
- moonbug 6y ago
  local buffers need to be sized to the bandwidth-delay product. come on computer people, you should know this.
snarf21 6y ago
Very true, but this whole incident was caused by greed. This ship should NEVER have been let into the canal in the first place. I expect it and ones of its size won't be again. The size makes the wind much more of a problem and the size makes the rescue efforts problematic as well.
- mnw21cam 6y ago
  You know that the ship was designed specifically around the published size limit of the canal, don't you?
  - VBprogrammer 6y ago
    Yes, like 125cc motorcycles and Easyjet sized carry on luggage the minute you publish maximum dimensions you can expect someone to size their product exactly to the limit. I think a more realistic outcome is that ships of this size require auxiliary tugs to transit.
    - oivey 6y ago
      They could have given a limit with adequate margin for safety to begin with, too. I suppose they still could change the limits. Shipping companies that have ships over the new limit would be pissed, but it’s not like there is a real alternative to the Suez Canal.
      - VBprogrammer 6y ago
        There are some complications, for example some huge Cruise ships have so much manoeuvrability that they could transit in reverse without breaking a sweat. Similarly large military ships with powerful rudders and multiple engines. Even if the size is the same the manoeuvrability is not even close.
    - willyt 6y ago
      Or in certain forecast weather conditions ships over a certain windage will require to be escorted by a tug or will have to wait.
krisoft 6y ago
I find your comment quite trite. It can be boiled down to: Ha! Things can disrupt JIT operations, don't these bozos know that? In reality these decisions are made by professionals armed with heaps of statistics to make the best decision. I'm a nobody who knows nothing, yet I understand that ships are sometimes late. It is sometimes caused by weather, or mechanical issues, or piracy, or war. I trust that the professional know this too and more. Why do you think you know better than them what fits their reliability guarantees and budget the best?
- adrianN 6y ago
  I've seen enough decisions made in companies to put a lot less trust into "they employ experts, I'm sure they do the right thing".
  - stinkytaco 6y ago
    If there was a article on HN about a company sunk by its excessive inventory and storage costs, we'd all be kibitzing about how they should use JIT inventory. Some companies make mistakes, some people aren't as expert as they think, but in aggregate I can't really do anything but assume that other people know more than I do about most things.
- bopbeepboop 6y ago
  > Why do you think you know better than them what fits their reliability guarantees and budget the best? The point isn’t whether JIT meets “their reliability guarantees and budget the best” — it’s whether what companies guarantee and provide is best for society at large. That a company benefits from JIT is irrelevant to what OP was saying and your “trust the experts” response is a non sequitur. Also, I worked on a team doing logistics for a F10 company — your faith in “experts” is wildly misplaced.
- rangibaby 6y ago
  > Ha! Things can disrupt JIT operations, don't these bozos know that For a real world example of bozos not knowing that, see Toyota in 2011.
DVk6dqsfyx5i3ii 6y ago
Perhaps the benefits of JiT inventory exceed the costs of occasional disruptions.
jojobas 6y ago
If you don't use JIT your competition will put you out of business before the next ship blocks Suez canal.
koheripbal 6y ago
Much of the canal has two separate lanes. It's unfortunate that the ship was stuck in the section that had only one lane. I wonder if there will be a project to create a 2nd lane.
hef19898 6y ago
I would really be surprised if anything managed by JIT was on that ship. JIT is mostly done in the last step before assembly, and even there buffets are put in place. JIT works badly with demand fluctuations (the further upstream, the worse those get in a supply chain) and supply fluctuations. And even without a blocked canal, two weeks of delay with containers is pretty common. Weather, port congestion, customs,... you name it. It is a quite common misconception that supply chains all run on JIT nowadays.
brilee 6y ago
I did some thinking about this idea on my blog - https://www.moderndescartes.com/essays/homeostasis_volatility/ https://www.moderndescartes.com/essays/homeostasis_volatilit... the short: think of it like the Kelly Criterion. There's an optimal level of risk to take here, which you can update based on real world experiences.

tome 6y ago

I seem to recall that as originally conceived in the Toyota Production System, suppliers of Just In Time inventory were supposed to be sited in the same location as you. I wasn't able to find a reference for this though ...

cptskippy 6y ago
When I was working with a logistics firm who did JIT for Seagate/Hitachi, the warehouse was across the street from Hitachi and they could handtruck deliver hard drives if need be.
rtkwe 6y ago
Even that probably wouldn’t save you from an event like this if you’re in Europe because your supplier’s supplier (or your supplier’s supplier’s supplier, you get the gist) probably sends things through the Suez.
Jenk 6y ago
Yes, JIT inventory meant delivered "from the warehouse to the workstation" and not "intercontinentally shipped with extremely slim margins." But that's not what has happened here. Continually increasing demand (read population growth + geo-conglomeration of industries) has stretched the global supply network(s) to fragility, necessitating JIT in absurd distances and quantities, in turn requiring ships 400mx50m to squeeze through canals they barely clear the bed of at speeds slow enough for them to not cause over-swell but not fast enough for them to have enough thrust to overcome crosswinds.
- ckdarby 6y ago
  Sounds like an opportunity for the country to start on another canal. They'll be able to take advantage of the clear demand, solve the issues of the existing, have a redundancy plan if either canal has an issue or needs repairs and I don't think it'll have a hard time getting support considering everything going on at the moment.
brightball 6y ago
If I remember correctly, one of the early bits of hype around Dell was basically having all of their suppliers right there next to them.
bluGill 6y ago
They don't have to be in the same location. However the farther you are from the site of production the more product needed in queue. Toyota stocks the parts bin on the assembly line from a warehouse on site. The warehouse is stocked less often than the parts bins. Depending on how long it takes to get an order the warehouse has more of some parts than others. Toyota also has extra parts as risk management where they determine that there is a high risk of the part not being available to order. Toyota also shares their order predictions with suppliers well in advance so the supplier can plan ahead what they need to deliver. Toyota also knows their supply chain 6+ level deep, if mine workers go on strike they prepare backup plans for 6 months out. Toyota also does a lot of other things that I'm not aware of to ensure that when they need something it arrives, not a moment sooner or latter. Toyota isn't the only company that does this. If you supply Toyota they require you to do this in some form, including making your suppliers do it. (this is part of knowing their suppliers 6 levels deep - something they also do to ensure they don't use slave/child labor even indirectly). There are other companies that don't supply Toyota that have also taken this same lesson. The point is just in time is hard to do right. The simple elevator pitch has many obvious problems that those who do it are careful about ensuring they don't happen.
Scoundreller 6y ago
Too bad so many automakers failed to understand that continuous delivery means continuous purchasing. You cannot just stop buying your chips for a year and then complain when manufacturers re-tooled around you.
moonbug 6y ago
local buffers need to be sized to the bandwidth-delay product. come on computer people, you should know this.

snarf21 6y ago

Very true, but this whole incident was caused by greed. This ship should NEVER have been let into the canal in the first place. I expect it and ones of its size won't be again. The size makes the wind much more of a problem and the size makes the rescue efforts problematic as well.

mnw21cam 6y ago
You know that the ship was designed specifically around the published size limit of the canal, don't you?
- VBprogrammer 6y ago
  Yes, like 125cc motorcycles and Easyjet sized carry on luggage the minute you publish maximum dimensions you can expect someone to size their product exactly to the limit. I think a more realistic outcome is that ships of this size require auxiliary tugs to transit.
  - oivey 6y ago
    They could have given a limit with adequate margin for safety to begin with, too. I suppose they still could change the limits. Shipping companies that have ships over the new limit would be pissed, but it’s not like there is a real alternative to the Suez Canal.
    - VBprogrammer 6y ago
      There are some complications, for example some huge Cruise ships have so much manoeuvrability that they could transit in reverse without breaking a sweat. Similarly large military ships with powerful rudders and multiple engines. Even if the size is the same the manoeuvrability is not even close.
  - willyt 6y ago
    Or in certain forecast weather conditions ships over a certain windage will require to be escorted by a tug or will have to wait.

krisoft 6y ago

I find your comment quite trite. It can be boiled down to: Ha! Things can disrupt JIT operations, don't these bozos know that? In reality these decisions are made by professionals armed with heaps of statistics to make the best decision. I'm a nobody who knows nothing, yet I understand that ships are sometimes late. It is sometimes caused by weather, or mechanical issues, or piracy, or war. I trust that the professional know this too and more. Why do you think you know better than them what fits their reliability guarantees and budget the best?

adrianN 6y ago
I've seen enough decisions made in companies to put a lot less trust into "they employ experts, I'm sure they do the right thing".
- stinkytaco 6y ago
  If there was a article on HN about a company sunk by its excessive inventory and storage costs, we'd all be kibitzing about how they should use JIT inventory. Some companies make mistakes, some people aren't as expert as they think, but in aggregate I can't really do anything but assume that other people know more than I do about most things.
bopbeepboop 6y ago
> Why do you think you know better than them what fits their reliability guarantees and budget the best? The point isn’t whether JIT meets “their reliability guarantees and budget the best” — it’s whether what companies guarantee and provide is best for society at large. That a company benefits from JIT is irrelevant to what OP was saying and your “trust the experts” response is a non sequitur. Also, I worked on a team doing logistics for a F10 company — your faith in “experts” is wildly misplaced.
rangibaby 6y ago
> Ha! Things can disrupt JIT operations, don't these bozos know that For a real world example of bozos not knowing that, see Toyota in 2011.

DVk6dqsfyx5i3ii 6y ago

Perhaps the benefits of JiT inventory exceed the costs of occasional disruptions.

jojobas 6y ago

If you don't use JIT your competition will put you out of business before the next ship blocks Suez canal.

koheripbal 6y ago

Much of the canal has two separate lanes. It's unfortunate that the ship was stuck in the section that had only one lane. I wonder if there will be a project to create a 2nd lane.

hef19898 6y ago

I would really be surprised if anything managed by JIT was on that ship. JIT is mostly done in the last step before assembly, and even there buffets are put in place. JIT works badly with demand fluctuations (the further upstream, the worse those get in a supply chain) and supply fluctuations. And even without a blocked canal, two weeks of delay with containers is pretty common. Weather, port congestion, customs,... you name it. It is a quite common misconception that supply chains all run on JIT nowadays.

brilee 6y ago

I did some thinking about this idea on my blog - https://www.moderndescartes.com/essays/homeostasis_volatility/ https://www.moderndescartes.com/essays/homeostasis_volatilit... the short: think of it like the Kelly Criterion. There's an optimal level of risk to take here, which you can update based on real world experiences.