"Just-in-time inventory is great when it's working, but when it stops working, it's a huge disaster because you don't have material staged and you don't have strategic reserves." — Michael Murray, Senior Director of Global Supply Chain, DSV Inventory Management Solutions
For most of the 2000s, the mandate in manufacturing was lean: hold less, order just-in-time, and keep working capital off the balance sheet. Then came a string of shocks: COVID, the Suez Canal blockage, and a global chip shortage.
All of a sudden, just-in-time started looking more like just-in-trouble. Companies swung hard toward just-in-case, stockpiling inventory as insurance against the next disruption.
Michael Murray, Senior Director of Global Supply Chain at DSV Inventory Management Solutions, isn't ready to declare just-in-time dead.
In this episode of Art of Supply, Michael joins Kelly Barner to talk about the cost challenges that can result when inventory is managed reactively:
- Why the pendulum keeps swinging between just-in-time and just-in-case
- Why trade policy is becoming a bigger driver of inventory strategy than COVID ever was
- How a consolidated VMI model changes the math for OEMs, and why suppliers may be harder to convince than CFOs
Links:
Michael Murray on LinkedIn: https://www.linkedin.com/in/mp-murray/
Kelly Barner on LinkedIn: https://www.linkedin.com/in/kelly-barner-6884443/
Art of Supply LinkedIn newsletter: https://www.linkedin.com/newsletters/art-of-supply-6895142546301960193
Art of Supply on AOP: http://www.artofsupply.com
Subscribe to the Art of Procurement Newsletter: https://resources.artofprocurement.com/art-of-procurement-podcast-subscribe
