From just-in-time to just in case. In the struggle to maintain vital supply chains after September 11, not every company fared as well as Sears, Ford Motor closed five North American plants when engines and drive trains failed to arrive from Canada. Electronics manufacturer Solectron chartered a plane to transport components to Ireland from California. And General Motors delayed production of 10,000 cars and trucks when the company couldn’t get parts.
Because of the uncertainty created by terrorist threats, some experts expect to see a shift away from the tightly choreographed world of just-in-time logistics, where factories, suppliers, and purchasers use information technology to reduce inventory overhead. “We’ll see more inventory padding throughout the supply chain,” predicts Jennifer Chew, an analyst at Forrester Research in Cambridge, Mass. Just-in-time is undergoing a reexamination, giving way to systems that can accommodate greater flexibility and redundancy.
Kathy Dobie, an associate professor of business at North Carolina A&T State University and Author of the paper “Terrorism and the Global Supply Chain,” thinks companies will need to plan for extra costs related to supply-chain security. “I don’t think anyone can afford to build all-new systems,” she says. “But as companies develop new strategies and suppliers, they’ll look at them with security in mind.”
Although sophisticated information technology systems ushered in the just-in-time world, companies that managed September 11 most effectively credit their sucess to old-fashioned virtues such as good person-to-person communication, rigorous training, and preexisting contingency plans. What was true before the attacks is abundantly so in their wake: It’s not now-and never was-just about technology.
