Who Killed Just-In-Time?

The June edition of CFO magazine (www.cfo.com) suggests that the recent catastrophes in Japan are leading to a reassessment of just-in-time (JIT) manufacturing.  Say what!

We haven't had genuine just-in-time manufacturing since the off-shoring stampede reached critical mass several years ago.  Lengthened supply chains, coupled with variability in arrival, turned JIT into yesterday's news.  Carefully pared down inventories had to be built back up to accomodate the effects of time and uncertainty in the new "global" supply chain models.  Either that, or jeopardize service levels.

Now, the accountants at CFO are suggesting that inventories need to be deepened because of earthquake / tsunami / nuclear meltdown risks.  Can it be that they never truly understood what either JIT or supply chain management were all about?

Some level of inventory investment when replenishment cycles are long and not completely dependable is prudent.  But stocking up in case of Armageddon?  C'mon, get real.  That's like allowing six hours to get to the airport each time you go because some day the car might explode on the way there.

More inventory isn't the answer.  More proactive contingency planning might be.  Better access to alternative supply chain relationships couldn't hurt.  In the meantime, let's remember how much money the accountants thought we would save by moving manufacturing to Asia, and how foolish we would be not to.