Motivated by many media articles warning against JIT as the culprit for supply chain disruptions, the POMS College of Operational Excellence organized the webinar “Just-in-time or Just-in-case” in February 2022. Extending this online debate, five participants co-authored an article intending to provide advice for future research into JIT. After peer-review, the article “Just-in-time for supply chains in turbulent times” is now published open-access in Production and Operations Management.
The Mythbusters
In the article, professors Mohan Sodhi, Nada Sanders, Tom Choi, Stephan Wagner, and myself start with debunking five typical misconceptions in the popular press promoting “just-in-case” inventory over JIT:
- “JIT can be implemented piecemeal”—No, it cannot!
- “JIT means no inventory”—No, it means no excess inventory!
- “JIT is the cause of shortages”—No, in most cases it isn’t even used!
- “More inventory, not JIT, is a solution for resilience”—No, usually not!
- “JIT is the best operating model”—Theoretically yes, but practically nope!
We argue that most issues companies faced since the 2020 disruptions were not due to JIT but rather a deviation from its original principles—or not attempting to follow JIT at all.
For example, consider the the toilet paper shortage during the early months of the pandemic, a favorite for media articles and often linked to retailers’ JIT purchasing by journalists. In the Netherlands, Prime Minister Mark Rutte announced on public television in March 2020 that the country has stockpiles of toilet paper enough for ten years (!) to reduce public panic buying and hoarding. Clearly, toilet paper supply chains never operated JIT in the first place—so why blame it for the shortages?
JIT is fit for turbulent times
We advocate that firms should return to the JIT basics by developing closer relationships with suppliers and customers and minimizing geographical distances where possible. We also discuss how global supply chains entail much more variation and turbulence than the relationship between a factory and a nearby supplier, which means that JIT must be implemented differently. To ensure success, JIT should be applied selectively to appropriate supply chain segments, with only certain links adopting a textbook JIT approach. In conclusion, we believe a more turbulent world is better off with more JIT, not less…
Recommended further reading
- Choi, T., Netland, T., Sander, N., Sodhi, M., Wagner S. Just-in-time for supply chains in turbulent times, Production and Operations Management
- Lean and the Corona pandemic: A clarification [this blog]
- Roser, C. About Just in Time and Fluctuations (Like… a Pandemic…). allaboutlean.com
- Shih, W.C., What really makes Toyota’s production system resilient. Harvard Business Review
- Sheffi, J. Just-in-time Is the hero, not the villain, Industry Week
- Liker, J. Once again, here’s why JIT matters, lean.org