Has the trend towards Just in Time manufacturing stopped, or just stalled?
An item on this morning’s Today programme on BBC Radio Four piqued my interest. In the item, Justin Webb was reporting from the Japanese port of Sendai. Sendai was badly damaged by the Tsunami earlier this year and is still not functioning properly four months after the disaster. The unavailability of Sendai as an exporting port is having a major impact on Japanese manufacturers that rely on Sendai to ship their goods to the rest of the world. You can listen to Webb’s report on the BBC website.
What particularly interested me was the references to Just in Time manufacturing and impact of the disaster on global supply chains.
We all know that Honda was forced to move to a two-day week at its Swindon plant because of supply problems following the disaster and continues to operate at this level even now. The disaster has forced many companies to examine their supply chains to see if there is sufficient resilience built in to them so that such disasters do not have a major knock-on effect.
Just in Time
The drive to remove or slim down the size of warehouse inventories as a way of removing cost from the manufacturing process, so-called Just in Time manufacturing, has been around for many years. Its success depends on the stability of the supplier-client relationships and the integrity of the supply chain. Just in Time may remove cost from the manufacturing process when the supply chain is working, but every extra link in that chain introduces the potential for disruption. And, like any other chain, the chain itself is only as strong as the weakest link.
It is the responsibility of each link in the chain to ensure that it can meet its obligations to its client. If it has a single supplier then it must ensure that the supplier can also meet these obligations. The level of assurance can be improved by insisting that the supplier has properly prepared and audited Business Continuity Plans. If the supplier cannot be sure to meet its obligations under all conditions, then multiple suppliers must be used and those multiple suppliers must not be exposed to the same risk factors.
Whether the Japanese disaster will have a long term effect on the principle of Just in Time manufacturing remains to be seen. What can be seem however, is that all those involved in Just in Time supply chains should take a critical look at those chains to see if they really are as resilient as is believed.
Image by Caleb Eames, U.S. Marine Corps (http://www.marines.mil; exact source) [Public domain], via Wikimedia Commons
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