While just-in-time efficiency has become all the rage in a world where e-commerce has spiked because of physical distancing as a means of eliminating Covid-19 infection, the disruptive effect that the virus has had on supply means express production requires a rethink.
The reason, says Debbie Fogel-Monnissen, chief financial officer (CFO) for the Institute of Supply Management in Tempe, Arizona, is because supply shortages have exposed how many companies lack resilient inventory stock.
If there’s one thing that the pandemic has taught express delivery concerns, Fogel-Monnissen says, it’s that maxing out one’s inventory to maximise on just-in-time commitments, only to come up short in the longer term, is not a good strategy.
Consequently, CFOs need to give serious thought to how production efficiency can bolster inventory stock and the resulting benefits that resilient supply can have for projections of continued growth in the e-commerce sector.
In a nutshell, if you overpromise and underdeliver because you’ve run out of goods, the curve’s going to leave you behind.
Quoted by a supply chain news site, Fogel-Monnissen says: “Just-in-time by its nature requires some predictability, and the pandemic interrupted that cycle.”
Backing her views is Chicago-based consulting firm, BDO.
“The manufacturing industry is at a crossroads,” it says.
Referencing a report from March, BDO says at one end are the continued headwinds that manufacturers will face due to the pandemic recession.
“On the other are emerging opportunities for growth and innovation that organisations cannot afford to ignore. 2021 will be a balancing act between mitigating risk, navigating continued uncertainty and seizing new opportunities." – Supply Chain Dive