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> What has made the auto industry particularly vulnerable is its reliance on just-in-time delivery, where parts are brought in when needed, rather than being st
by jacques_chester 5y ago
> What has made the auto industry particularly vulnerable is its reliance on just-in-time delivery, where parts are brought in when needed, rather than being stockpiled.
This idea has gotten a lot of play lately. But the unstated alternative is to somehow perfectly forecast future demand for parts. That's very difficult in general and doubly difficult during a global pandemic. And, in fact, well-practiced lean outfits are better at knowing which inputs are potentially most disruptive, because they already obsess over lead times for everything.
Without lean practices you just wind up with giants piles of almost random inventory. That you'd have wound up with a giant pile of CPUs is a total crapshoot. But you would absolutely positively have a bunch of stuff you don't need and never will. And that inventory would choke the whole company to death.
The whole idea that JIT destroyed some glorious, flawless past is the Nirvana fallacy. "Oh, supply chain disruptions happen at all, therefore JIT is entirely useless". It's just a silly idea and needs to be mocked at every opportunity.
- genmud 5y agoWell, its the truth. You don't have to be a rocket scientist or have a PHD in supply chains to understand there are second/third order consequences by cancelling significant amounts of your forecasted production and then expecting your suppliers to magically pick up where you left off. Its why you keep production/manufacturing warm rather than do stops (which is what they essentially forced their suppliers to do by cancelling purchases). This is BCP 101 and I give the auto industry no sympathy since most of this pain was entirely self inflicted. They tried to push all the risk to their suppliers, left them holding the bag and had a shocked Pikachu face when they couldn't ramp back up to prior levels.
- jacques_chester 5y agoWe're talking about different things. A company running to optimise EOQ and favouring long production runs with few changeovers would be just as screwed by misunderstanding lead times of critical components. JIT doesn't excuse you from supply chain shocks but neither does Lost Magical Process Of The Wonderful Times Before JIT.