Are “Just-in-time” supply chains evil?

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It is strange what topics come up at an annual Liberal Democrat dinner, but this topic, in the post title above, came up at one I attended last week.

It’s a big subject.

First of all, we need to be clear what “Just-in-time” actually means. It is a phrase which is bandied about so that it sometimes ceases to have any precise meaning.

In its purest,original sense, Just-in-time refers to Just-in-time manufacturing, as defined by Wikipedia:

Just-in-time (JIT) manufacturing, also known as just-in-time production or the Toyota Production System (TPS), is a methodology aimed primarily at reducing flow times within production system as well as response times from suppliers and to customers. Its origin and development was in Japan, largely in the 1960s and 1970s and particularly at Toyota.

Wikipedia notes:

…the wide use of the term JIT manufacturing throughout the 1980s faded fast in the 1990s, as the new term lean manufacturing became established, as “a more recent name for JIT”. As just one testament to the commonality of the two terms, Toyota production system (TPS) has been and is widely used as a synonym for both JIT and lean manufacturing.

One element of TPS was the “kanban system” (which was not one and the same as JIT) and involved a square (or “kanban”) on the floor (in a manufacturing plant) which held parts. The operative would take parts from that square and when the square was empty, it was a sign that the square needed to be filled up with parts. The idea was that the square was just big enough to hold the minimum number of parts required – and no excess.

The “lean manufacturing” development of the TPS is often referred to a “Kaizen” – another Japanese word meaning “change for better” which basically means “continuous improvement”.

This is all very difficult to explain over Boeuf Stroganoff and trifle, with someone bawling out raffle ticket numbers behind you.

I think the term “Just-in-time” has been hijacked as a critical term for anything unpleasant emanating from the supply chain world – too many lorries – too many warehouses – not enough stock on the shelves at supermarkets etc etc.

However, it should be remembered that “Just-in-time” in its purest sense is about the elimination of waste. That is, particularly, the elimination of wasteful inventory.

It is all too easy to criticise firms for having too many lorries whizzing around the countryside at all hours.

However, it should be remembered that the opposite end of the supply chain spectrum is to have excess inventory. That means waste. Wasteful carbon activity spent building and maintaining warehouses. Wasteful carbon activity spent manufacturing and shipping parts around the world which are eventually trashed. Wasteful human activity in managing and maintaining that inventory.

Excess inventory is a bit like something, on the bottom of one’s shoe, left behind by a canine friend. It is easy to pick it up, but extremely difficult to get rid of it.

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