A classic example of “efficiency is the deadly enemy of robustness.”
IOW, the more efficient your system the less capable it is of handling bumps. The free market encourages constant striving towards the ideal of 100% efficiency.
But of course as we get closer to the ideal we simultaneously become less capable of dealing with interruptions to the free flow of stuff.
Department and discount stores used to have large warehouses around the country filled with stuff ready to be shipped out to the stores. It acted as reserve capacity.
Walmart set the standard by becoming more efficient. Their storage is essentially all in trucks on the road between the supplier and the store. Very few warehouses relative to the volume they do.
Therefore they will run completely out quickly if the flow is interrupted.
JIT AKA OSWO
(Just In Time, Also Known As: Oh Shucks We’re Out)
Efficiency is not the killer.
The real problem is the improper “leaning” of inefficient systems.
People draw down inventory, thinking that their ability to plan and their relationships with their suppliers are solid, and THEN they screw themselves.
Logistics efficiency is many, many things working to eliminate waste (material, movement, labor, rework, etc.). To be fair, an efficient system is MORE capable of handling bumps. A thin, strung-out, inefficient supply chain is the problem.
Wal-Mart doesn’t keep unnecessary material within the system. Their cross-dock approach guarantees low material costs, low distribution costs, low carrying costs and high turnover of goods.
You understand how they work, but you take away a very different appreciation. The only person who should be stockpiling (”hoarding”) is the end consumer.