JIT was adopted by the Japanese because of real estate for warehouses is in short supply and very expensive. For most American businesses to adopt the process it’s like wearing a raincoat in the desert, we have plenty of land and real estate was fairly reasonable until the communist inflation showed up.
The taxes on holding inventory are horrendous.
I remember my dad saying decades ago it got so bad his company made them totally Destroy brand new engines to keep from having to pay the sky-high inventory taxes.
Yea, it always struck me as STUPID, and hopefully that wonderful system will end. We have TONS OF ROOM for warehouses here in Texas and while they do cost money to operate, they also have advantages, such as allowing bulk purchases.
Also, the idea that car companies could fall flat on their faces over COMPUTER CHIPS, of all things. One could probably fit all the chips used by Toyota in a year in a single Home Depot, as they’re not exactly hogs when it comes to storage volume. No excuse for that. Tires, seats, fuel tanks, yea...they do take up room. Not chips.
No purchasing agent in the world will be getting fired for excess inventory or laying in safety stock that would have been unthinkable 2 years ago.
Just In Case, eh? ...prepping hits the business environment.
lol, are they calling JIC new? Then there was “safety stock”
bkmk
Ping
Prepping is a JIC accounting system.
JIT is usually based on the delusion that everything is always available, the supply chain works perfectly all the time, nothing will fail testing, and there is no adverse weather.
JIT often expose failures within a company, from inbound loading dock to store back rooms. Instead of fixing the problems, the companies lie to themselves about how effective their systems were.
The CORE PROBLEM WAS OFFSHORING US INDUSTRY TO THE 3rd WORLD.
It isn’t JIT if your company is in the US and your suppliers are in China. The Japanese companies, like Honda, located their suppliers as close as possible to the manufacturing facility.
It was never a good idea to rely on China for everything.
Suddenly Ford’s old River Rouge plant looks better and better. Wood and iron ore came in one side and Model T’s drove out the other side.
I’m not sure everyone knows this - but companies are TAXED on held inventory!
That’s why you see stores ‘doing inventory’ on a yearly basis, usually in August, or having pre-inventory sales - car lots do this usually in October, to shed last year’s models. You know - back when dealerships had more than 15 cars on the lot? *SNORT*
(OT - talked to a friend yesterday who sells campers & RVs. They have FIFTEEN on the lot right now; usual inventory is 200!)
So, you’re TAXED when you purchase the item wholesale, you’re TAXED when you re-sell the item to your customer and you’re TAXED if it sits in your inventory for a year!
It’s insanity! I have managed two multi-million dollar businesses for others, I have NEVER truly understood how any of us manage to make a living with all the TAXES we had to deal with!
Also payroll TAXES, property TAXES, your employees pay TAXES on the income they earn from you, etc. It’s MADNESS when you look at the big picture and compare it to your bottom line, let alone having in stock what everyone wants or needs at any given moment!
Here’s an idea! Quit TAXING businesses to DEATH. That might go some ways to solving some of the problems Mother Government creates for the rest of us in the FIRST place! Grrrr!
"Until the stability returns, the panic will continue,"LOL. The new normal, panic. Government LOVES this. It lives for panic, and will create panic where none exists. Need more government to get less panic, says the government.
Only the laws of nature will prevail. Reason is out the window,
JIT = Just in Time = OSWO = Oh Schiff We’re Out