[archildress]

Thank you Toyota and practitioners of "lean" / "Six Sigma" that told us all about the wonders of just-in-time, to only carry exactly as much inventory was needed for demand. After all, we'd rather have that cash in a bank account than tied up in inventory.

While well intentioned, the problem is that it all relies on assumptions, largely tied to demand. And when demand goes through a wild whipsaw, and everyone takes diverging viewpoints of the shape of that whipsaw curve, the highly interdependent chain snaps.

Labor is an issue for sure. But make no mistake, the "restart from COVID" supply chain conundrum owes a lot of its pain to optimizing everything to the hilt, then reacting slowly as the world around us changed.

[jdlshore]

I hear this complaint frequently, and I always wonder if the people making it are well-informed about supply chain logistics or are just parroting what they’ve heard elsewhere. Because my understanding of TPS and Lean is that it solved serious issues with supply chains involving waste due to outdated and rusted (figuratively and literally) inventory. It also doesn’t prevent the use of buffers to absorb shocks, as Toyota demonstrated in the first year of the pandemic.

[philwelch]

The problem isn't with the methodology itself but with how it's implemented in practice. Lean makes your buffers a lot more visible to management, and if you combine that with a culture of short-sighted cost-cutting, you run into issues. The problem isn't lean; it's a management culture of short-sighted cost-cutting.

[mzs]

Here's recent supply-chain thread calling-out a current bottle neck:

https://threadreaderapp.com/thread/1451543776992845834.html

https://twitter.com/typesfast/status/1451543776992845834

[jawns]

I think some companies recognized that it's possible for once-in-a-generation and once-in-a-lifetime disruptive events to occur, but they crunched the numbers and decided that they could squeeze more from lean practices over the long term than they stood to lose in the disruptive events.

Like, suppose you could make $X in profit that is highly resilient to infrequent disruption or twice that with the understanding that every 20 years or so, you're going to have a few bad years because of black swan events. You might determine that you're willing to take your lumps during the chaotic times.

[mywittyname]

Planning for black swan events would be really dumb: they will never go exact as you plan them to. What if they planned for a GFC-like black swan event where nobody bought cars? Or one where gasoline suddenly went to $400 barrel?

There are a million possible black swan events and there's a million ways to plan for them.

[londons_explore]

Few companies plan that far ahead....

You'd get the same outcome by hiring someone and telling them they get a bonus proportional to increased profits, and no bonus in bad years.

[yunohn]

> Thank you Toyota and practitioners of "lean" / "Six Sigma" that told us all about the wonders of just-in-time, to only carry exactly as much inventory was needed for demand.

While Toyota might have popularized the concept, it seems odd to blame them for the common-sense idea of just-in-time.

It’s quite natural, normal humans also don’t hoard everything they can possibly think of needing, nor should companies. It’s eco-friendly to be JIT as it leads to less wastage; while optimizing for rare shortages will result in wastage all the time.

[blix]

> It’s quite natural, normal humans also don’t hoard everything they can possibly think of needing...

For most of human history we did exactly that. The deeply interconnected "JIT Consumption" world is really quite new. And if consumption patterns suddenly change then you can't buy toilet paper anymore.

[snarf21]

Would you be making the same statement if covid hadn't happened? I think companies realized that net net, JIT is more profitable and they'll worry about the outliers when/if they happen.

[imtringued]

The problem isn't Toyota. It's that companies are so damn risk averse that they would rather have money in bank accounts rather than take a risk and keep producing too much even during a half year downturn.

[cascom]

Except that when companies do this, and then ask to be rewarded for making that investment, they are lambasted for price gouging or profiteering…just ask any hardware store that has sat on a pile of snow shovels through the summer in order to capture a premium price when a blizzard is approaching…

[Workaccount2]

I don't think it's risk aversion so much as it is "Parts on the shelf don't pay interest/dividends".

[LurkingPenguin]

Toyota actually isn't as JIT as you make it out to be, but that notwithstanding, what's the alternative? Stockpile 30 years' worth of Christmas ornaments in warehouses in Oklahoma, right next to the oil storage?

[archildress]

It’s almost as if there are happy mediums in between the two scenarios. :)