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COVID Supply Chain Optimisation – from Just in Time to Just in Case?


Taiichi Ohno is a hero of mine. In the early 70’s Taiichi Ohno, was an industrial engineer and executive that worked for Toyota. He devised a way to optimise his company’s output and cash flow by employing a new discipline called Just-in-time (JIT). With JIT, all components would arrive just in time, usually within hours of when they would be required, sometimes minutes. This meant JIT had no need for inventory or stock, neither raw materials or work in progress or finished goods. This greatly reduced costs. JIT, amongst other key processes Taiichi devised, propelled Toyota into the largest producer of motor vehicles in the world today.

Where Taiichi lead, others followed. Taiichi created a JIT tsunami. Soon many successful global organisations had JIT and life was good.

Then Covid came and the game changed. Lockdowns meant that production risk was proportional to one’s own global supply chain exposure. Now it is 8-10 months wait for a Toyota Camry and 12 months for a Suzuki Jimny. As with all Black Swan events, organisations that are highly optimised, highly leveraged, with complex global supply chain exposure have been the first to suffer.

Indeed JIT and Covid is like oil to water. It was heartening to note that on a recent health check of CCI’s supplier’s inventories, that all reported good inventories levels with most having access from 4 to 6 weeks stock on hand, with Kimberley Clark notably reporting 3-4 months stock on hand. In the background, all our suppliers have been bringing on board as much locally sourced product so they can maintain supply.

So Taiichi’s world has gone 360 degrees, from Just in Time to Just in Case from globally sourcing to sourcing locally. At CCI we are confident that our suppliers will be able to service you now and into the future and urge you to support them as they in turn employ and support many other Australians.

Alex Kriznic
Procurement Manager
0418 773 858