The End of Just-in-Time? Building Resilience in a Disrupted World

Global supply chains, once a model of efficiency, are now in a state of perpetual disruption. From pandemics to geopolitical tensions, businesses are scrambling to build resilience and agility into their logistics networks. The era of just-in-time may be over. For decades, 'just-in-time' (JIT) was the undisputed king of supply chain management. The philosophy of receiving goods only as they are needed for production or to meet customer demand promised to reduce inventory costs, increase efficiency, and maximize profits. And for a long time, it worked. But the events of the past few years have exposed the inherent fragility of this hyper-efficient model. The COVID-19 pandemic, with its lockdowns, border closures, and labor shortages, sent shockwaves through global supply chains, leading to widespread product shortages and crippling delays. The war in Ukraine and other geopolitical tensions have further exacerbated the situation, disrupting the flow of key commodities and creating a new layer of uncertainty. In this new era of perpetual disruption, businesses are being forced to rethink their approach to supply chain management. The focus is shifting from pure efficiency to resilience and agility. Companies are moving away from single-sourcing and towards a more diversified supplier base. They are investing in technology to gain greater visibility into their supply chains, allowing them to anticipate and respond to disruptions in real-time. And they are reconsidering the wisdom of minimizing inventory, opting instead to build up buffer stocks of critical components. This shift has profound implications for the future of global trade. We are likely to see a move towards more regionalized supply chains, with companies near-shoring or on-shoring production to reduce their reliance on far-flung suppliers. We will also see a greater emphasis on collaboration and data sharing between supply chain partners. The era of the lean, hyper-efficient supply chain is not necessarily over. But it is evolving. The supply chain of the future will be one that is not only efficient, but also resilient, agile, and able to withstand the inevitable shocks and disruptions of our increasingly turbulent world.