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This is largely a result of just-in-time manufacturing. Companies hate holding on to inventory. Most companies now don’t hold on to any extra stock needed to

This is largely a result of just-in-time manufacturing. Companies hate holding on to inventory. Most companies now don’t hold on to any extra stock needed to manufacture their products. This is great for your finances in normal times. But don’t complain when there is a shortage and you literally have zero slack for delays and your factory sits idle — that’s the well-known drawback.

avs733 5y ago
I agree but with a caveat, it's largely a result of BAD just-in-time manufacturing. Zero inventory production systems (ZIPS) are what people often mean when they talk about JIT, they are different. Toyota, one of the originators and leaders of JIT/lean has not had this problem...because they don't blindly ZIPS [0]. Not holding inventory is great for a lot of reasons, but it is a calculated risk...Toyota learned from experience that if they want to do it, they need to understand risk all the way up their supply chain. They largely aren't having this problem. They de-risked certain things because they really treat TPS and everything associated with it as a philosophy not a set of heuristics that should just be implemented blindly. Manufacturing something is all tradeoffs...there is (almost) nothing with a universal upside. Sure I want to hold less inventory, but JIT is actually about manufacturing time, not inventory. If I have NO inventory and NO ability to get inventory my manufacturing time goes up while I wait with my thumb in the fertilizer pipe. I've worked with a couple of manufacturing plants (and consultants...) that treat 'JIT' inventory management as something that can simply be pushed off to vendors and then the upside of less inventory enjoyed. They have specs and forms and certification and paperwork...but nobody looks at it. Those are the companies struggling now. They outsourced without fully understanding the risk of the outsourcing. Usually this doesn't bite the world, it bites one or two companies that relied on a certain part (someone misses an EOL notice) or a certain vendor (who goes bust because the owner's grandson ran the thing into the ground). It's like my students who make choices in the first week of the semester that seem minor...and then are frustrated when it effects their grade at the end of the semester (sorry, too much grading this week) [0] https://www.autoblog.com/2021/03/09/toyota-how-it-avoided-semiconductor-shortage/ https://www.autoblog.com/2021/03/09/toyota-how-it-avoided-se...
- p_l 5y ago
  (probably wrongly worded) Wouldn't toyota model essentially set a required buffer size in kanban, essentially ensuring a certain level of stock decided upon by risk management? The pull flow would then ensure that the stock fluctuates around that value instead of being driven to 0, because taking a "card" out of stock might trigger purchasing of more stock?
  - avs733 5y ago
    Toyota (for example) doesn't get the chips directly, this is about visibility/planning/management of your vendor's vendor's vendor's. Those chips (Tier 3+) become boards (Tier 2) become center consoles (Tier 1) that an OEM installs. The question isn't how stock is tracked or risked, its who is responsible for it.
ArkanExplorer 5y ago
No, this is the result of people like Neill Ferguson forecasting that COVID would be multiple times worse than it turned out to be, and Governments and the media believing him. For example this report from March 2020 was highly influential and predicted 2.2 million deaths in the US in an 'unmitigated epidemic' scenario: https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf https://www.imperial.ac.uk/media/imperial-college/medicine/s... When in reality the official COVID death count in the USA was 580,000. And meanwhile the best public health response seems to have been... to do nothing, given that Sweden has a lower COVID death toll per capita than countries which did lockdown and use masks, and is overall merely #27 in the world for COVID deaths per capita: https://www.statista.com/statistics/1104709/coronavirus-deaths-worldwide-per-million-inhabitants/ https://www.statista.com/statistics/1104709/coronavirus-deat... With deaths there in 2020 being only 6% higher than 2018 (and deaths in 2019 were 4% lower than 2018, suggesting mortality displacement explains much of that increase): https://www.statista.com/statistics/525353/sweden-number-of-deaths/ https://www.statista.com/statistics/525353/sweden-number-of-... These sort of mega-flus come and go once a decade (look at 2009 Swine Flu, 1993 Flu, 1988 Flu, 1976 Flu, the Asian flus of the 50s and 60s - all basically forgotten): https://swprs.org/wp-content/uploads/2020/10/sweden-monthly-deaths-1851.jpg https://swprs.org/wp-content/uploads/2020/10/sweden-monthly-... But there were political factors in 2020 (a major re-election year in the USA) which drove the completely unusual and unjustified lockdown response. Its unfair to blame JIT manufacturing.
- deleted 5y ago
  [deleted]
- CharlesW 5y ago
  > For example this report from March 2020 was highly influential and predicted 2.2 million deaths in the US in an 'unmitigated epidemic' scenario: You just said yourself that the 2.2 million was the "do nothing" scenario, and as we've seen in India it could've easily been that. You also just said said we did many things — "unusual and unjustified" things, in your opinion — therefore mitigating that worst-case projection. I personally lost the point you were trying in these self-contradictions, but I am curious where you were going.
lobocinza 5y ago
The result of cutting too many "wastes".

avs733 5y ago

I agree but with a caveat, it's largely a result of BAD just-in-time manufacturing. Zero inventory production systems (ZIPS) are what people often mean when they talk about JIT, they are different. Toyota, one of the originators and leaders of JIT/lean has not had this problem...because they don't blindly ZIPS [0]. Not holding inventory is great for a lot of reasons, but it is a calculated risk...Toyota learned from experience that if they want to do it, they need to understand risk all the way up their supply chain. They largely aren't having this problem. They de-risked certain things because they really treat TPS and everything associated with it as a philosophy not a set of heuristics that should just be implemented blindly. Manufacturing something is all tradeoffs...there is (almost) nothing with a universal upside. Sure I want to hold less inventory, but JIT is actually about manufacturing time, not inventory. If I have NO inventory and NO ability to get inventory my manufacturing time goes up while I wait with my thumb in the fertilizer pipe. I've worked with a couple of manufacturing plants (and consultants...) that treat 'JIT' inventory management as something that can simply be pushed off to vendors and then the upside of less inventory enjoyed. They have specs and forms and certification and paperwork...but nobody looks at it. Those are the companies struggling now. They outsourced without fully understanding the risk of the outsourcing. Usually this doesn't bite the world, it bites one or two companies that relied on a certain part (someone misses an EOL notice) or a certain vendor (who goes bust because the owner's grandson ran the thing into the ground). It's like my students who make choices in the first week of the semester that seem minor...and then are frustrated when it effects their grade at the end of the semester (sorry, too much grading this week) [0] https://www.autoblog.com/2021/03/09/toyota-how-it-avoided-semiconductor-shortage/ https://www.autoblog.com/2021/03/09/toyota-how-it-avoided-se...

p_l 5y ago
(probably wrongly worded) Wouldn't toyota model essentially set a required buffer size in kanban, essentially ensuring a certain level of stock decided upon by risk management? The pull flow would then ensure that the stock fluctuates around that value instead of being driven to 0, because taking a "card" out of stock might trigger purchasing of more stock?
- avs733 5y ago
  Toyota (for example) doesn't get the chips directly, this is about visibility/planning/management of your vendor's vendor's vendor's. Those chips (Tier 3+) become boards (Tier 2) become center consoles (Tier 1) that an OEM installs. The question isn't how stock is tracked or risked, its who is responsible for it.

ArkanExplorer 5y ago

No, this is the result of people like Neill Ferguson forecasting that COVID would be multiple times worse than it turned out to be, and Governments and the media believing him. For example this report from March 2020 was highly influential and predicted 2.2 million deaths in the US in an 'unmitigated epidemic' scenario: https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf https://www.imperial.ac.uk/media/imperial-college/medicine/s... When in reality the official COVID death count in the USA was 580,000. And meanwhile the best public health response seems to have been... to do nothing, given that Sweden has a lower COVID death toll per capita than countries which did lockdown and use masks, and is overall merely #27 in the world for COVID deaths per capita: https://www.statista.com/statistics/1104709/coronavirus-deaths-worldwide-per-million-inhabitants/ https://www.statista.com/statistics/1104709/coronavirus-deat... With deaths there in 2020 being only 6% higher than 2018 (and deaths in 2019 were 4% lower than 2018, suggesting mortality displacement explains much of that increase): https://www.statista.com/statistics/525353/sweden-number-of-deaths/ https://www.statista.com/statistics/525353/sweden-number-of-... These sort of mega-flus come and go once a decade (look at 2009 Swine Flu, 1993 Flu, 1988 Flu, 1976 Flu, the Asian flus of the 50s and 60s - all basically forgotten): https://swprs.org/wp-content/uploads/2020/10/sweden-monthly-deaths-1851.jpg https://swprs.org/wp-content/uploads/2020/10/sweden-monthly-... But there were political factors in 2020 (a major re-election year in the USA) which drove the completely unusual and unjustified lockdown response. Its unfair to blame JIT manufacturing.

deleted 5y ago
[deleted]
CharlesW 5y ago
> For example this report from March 2020 was highly influential and predicted 2.2 million deaths in the US in an 'unmitigated epidemic' scenario: You just said yourself that the 2.2 million was the "do nothing" scenario, and as we've seen in India it could've easily been that. You also just said said we did many things — "unusual and unjustified" things, in your opinion — therefore mitigating that worst-case projection. I personally lost the point you were trying in these self-contradictions, but I am curious where you were going.

lobocinza 5y ago

The result of cutting too many "wastes".