3 ms·
Sure, but that still is less efficient when things are working fine. Any time you tie up resources that you don't absolutely have to is a loss of efficiency.
by Aerroon 5y ago
Sure, but that still is less efficient when things are working fine. Any time you tie up resources that you don't absolutely have to is a loss of efficiency.
- piva00 5y agoIn this case isn't it needed to consider efficiency over the short and longer term? And for the long-term efficiency one of the parameters would be resilience to shocks, which affects the short-term efficiency (more inventory juggling) but is healthier over a longer span of time.
- Aerroon 5y agoShort-term efficiency is there all the time. Shocks are not. If the space you're competing in has enough competition then the margins will be low. The companies that focus on short-term efficiency could end up outcompeting the companies that keep large buffers.
- bobthepanda 5y agoAnd at the same time every order you're not filling because of an overzealously tight supply chain is a loss of business. Penny wise and pound foolish. If it makes sense to stockpile for the company that pretty much invented lean manufacturing as we know it, it's not without merit.
- Aerroon 5y agoCars are very high cost items. They probably have substantial margins on them. On the other hand, a product that has very low margins is going to find it much more difficult to stockpile.