Just-in-time inventory is a disaster waiting to happen. See my 26 February 2010 post: http://skepticaltexascpa.blogspot.com/2010/02/lean-manufacturings-dangers.html.
Wednesday, June 30, 2010
Just-In-Time For Disaster
"Car production lines worldwide look set to grind to a halt as the flight ban over much of Europe begins to starve manufacturing of key electronic components. ... The problems highlight industry's dependence on complex, worldwide supply chains that need multiple modes of transport to deliver goods and compenents just in time to where they are needed. ... Air freight accounts to a tiny amount of world trade by weight--about 0.5 per cent for the UK. But the disruption has highlighted how it plays a vital role in supplying key, high-value components to many manufacturers. In spite of its tiny volume, it accounts for 25 per cent of UK trade by value. ... They are now looking to revert to a mixture of air and sea, moving goods from aircraft in Dubai on to ships to prevent goods piling up in one place. ... Companies have become more vulnerable to disruption since moving to just-in-time producton methods, where hardly any stock of products in held, said Emma Scott, representation manager for the Chartered Institute of Purchasing & Supply in the UK", John Reed at the FT, 21 April 2010, link: