this post was submitted on 06 Sep 2023
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I work in a manufacturing company that was owned by the founder for 50 years until about 4 years ago when he retired. He disagreed with a lot of the ideas behind lean manufacturing so we had like 5 years worth of inventory sitting in our warehouse.
When the new management came in, there was a lot of squawking about inefficiency, how wasteful it was to keep so much raw material on the shelf, and how we absolutely needed to sell it off or get rid of it.
Then a funny little thing happened in 2020.
Suddenly, we were the only company in our industry still churning out product. Other companies were calling us, desperate to buy our products or even just our raw material. We saw MASSIVE growth the next two years and came out of the pandemic better than ever. And it was mostly thanks to the old owners view that "Just In Time" manufacturing was BS.
Cool story, but a once every 150 years pandemic is hardly a good reason to keep wasting money on storing stuff. A fire or a flood was much more likely to wipe it all out in 50 years.
Even in your anecdote the owner never actually benefited from the extra costs.
Depending on what you're producing costs to maintain extra inventory of raw materials can be massive and for the company the size of Toyota, multiply that by million.
You're not wrong, but the real answer is somewhere in between.
Imagine doing something or having a life/business philosophy that doesn't exist for your own soul benefit, and exists maybe for the benefit of others.
Oh man. I work for an OEM and have almost the same story except the CEO didn't retire so our shelves were never bare. A large part of our sales last year was because our competition couldn't source parts and we could. Also since they have a skeleton engineering crew they couldn't figure out how to improvise (at least this is what our salespeople are claiming).
2022 I spent 3 hours a day, every single working day, just making ECNs for parts out of stock.
Lean JIT is such fucking crap. When a customer line goes down they are bleeding who knows how many millions a day. They want a solution right freaken now. So they call the OEM and we tell them that part that died we have right here on the shelf and we can overnight it.
But you know how you really know that JIT Evengelical types are full of it? Talk to any of them now and they won't say something like "look, normally it works but no one could have predicted this" they will double down on it and say it works but was implement incorrectly. It isnt "true" JIT.
Many years ago I read a sentence that I use every single week of my life "all ideology can do is reassert itself endlessly". When I hear crap like that, how X works if and only if it is true-X I know I am dealing with ideology. When I hear that X works under very specific situations and only gives specific results I know I am dealing with facts. Yes if the customer is never in a rush, there isn't a world shaking event, and you are running out of capacity for storage JIT might be an answer.