From just in time to just too late …and back?

Enterprise and manufacturing resource systems for many years have been designed and optimised for long term planning dealing with what I would call manageable disruptions. Decreasing stocks and pushing them as far back into the supply chain was possible as disruptions could be acted on and structurally resolved in a reliable manner. Mostly because these were related to own or supplier performance. Manageable. In case of less easy to resolve issues, building safety margin (i.e. time) into the overall plan mitigated the impact and had acceptable impact on the overall supply chain cost. Basically as a balloon which is given pressure on one or two points, stretching on the other end yet staying intact.

Pre-Covid, the supply chain world was already changing in terms of more difficult to manage disruptions occurring at the same time, overlapping areas of the supply more often and requiring more complex solutions to avoid long lasting and costly impacts on the supply chain. Changing weather patterns, geopolitical tensions and humanitarian crisis, free market constraints to name few impacts. More pressure points on the balloon.

Upon Covid’s entry into the game, too many different pressure points popped the supply chain balloon, impacting any industry with a global supply chain. Now that the largest impact of Covid on society seems to be behind us, the initial kneejerk reaction of increasing safety margins in enterprise and resource management plans that resulted in excessive higher safety stocks turns out to be not so easy to roll back.

The Just In Time model was already getting out of date, but is certainly doomed to stay a Just To Late model, unless companies let their business planning systems start taking into account short term and future expected disruptions, allow for fast pace purchasing and logistics changes and stop making assumptions that business can be planned well ahead for.

The right mix of predictive and prescriptive analytics, combined with AI solutions that can suggest or automatically make changes in the company’s supply & demand model and logistics purchasing are a key to success for the future. Such a change is tremendously challenging yet necessary to run an efficient global business in the future.

At Go Improve, we can help you transforming your business and supply chain, finding, and implementing solutions that optimise the mix of people, process and technology in a sustainable and scalable manner. Creating value to your overall business goals.