Four Complex Supply Chain Challenges To Just-In-Time Delivery
Four Complex Supply Chain Challenges To Just-In-Time Delivery
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The Challenges of Just-In-Time Delivery

Just-in-time delivery works well when an integrated global economy is functioning smoothly with few barriers to trade. However, over the past few years, the assumptions underlying lean manufacturing have been severely challenged for several reasons.

  1. Even before the pandemic struck, there was some movement toward diversification of supply lines stemming from the Sino-U.S. trade dispute in 2018. 
  2. In 2020, COVID lockdowns began to create severe supply chain disruptions. 
  3. At the same time, consumer spending shifted away from services toward manufactured goods, and demand for manufactured items began to outstrip the global economy’s ability to produce them. 
  4. Finally, in 2022, renewed COVID lockdowns in China deepened the world’s logistical challenges for manufactured goods at the same time as Russia’s invasion of Ukraine disrupted the supplies of key commodities. 

We now have a global economy that is more fragmented and less integrated, which poses severe challenges to the just-in-time model. So, where do we go from here? What happens to the just-in-time, lean manufacturing model? 

The Outlook of Just-In-Time Delivery

Both companies and governments are making strong moves to diversify supply chains but it’s a complicated and long process that may take years. In the short term, the world’s logistical issues might grow worse. China appears to be favoring a strategy of zero COVID over economic growth, which has global implications for the manufacturing and consumer product sectors. Meanwhile, the impact of the Russo-Ukrainian conflict on the commodity markets is just beginning to be felt.

Wheat

Ultimately, consumers are likely to experience the world’s logistical challenges in the form of higher prices for manufactured goods, and companies may see reduced profit margins as input costs climb and they find it more challenging to get products to market. Just-in-time won’t disappear but making supply chains more resilient will likely come with increased costs.

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