Companies switch from of just in time to just in case strategy due to disruptions in the delivery process
THE INVENTORY practices of many companies around the world used to be known as 'just in time' (JIT). Following the terrorist attacks on the United States on September 11, 2001, these practices were changed to 'just in case'.
'Just in time is an inventory strategy that is aimed at reducing in-process inventory and its associated costs,' said Owen Tang, tutor in law in the Department of Logistics and programme manager of the Master of Science (MSc) in global supply chain management at Polytechnic University's Graduate School of Business.
'The technique was introduced by Taiichi Ohno during the early 1960s. He is considered to be the father of the Toyota production system.'
Before the US attacks, most manufacturers operated according to just in time inventory practices. This meant keeping only enough materials, parts or supplies on hand to last a few days - and in some cases, a few hours. The attacks resulted in concerns in the US government that significant changes needed to be created in the supply chain management process to protect national security.
'As the US response to 9/11 indicates, the supply chain disruptions were not necessarily caused by the terrorist attacks themselves, but rather by the government's response to the attacks, such as closing borders and shutting down air traffic,' Mr Tang said.
