This type of buffering actually leads to the sort of supply chain bottlenecks we are experiencing. If the demand for stone suddenly rises to a point where much more walls and concrete is demanded, you get a massive delay in the production line because the stone needs to get mined and transported and crushed and transported &c before it even reaches the wall factory.
It's not entirely dissimilar to the chip shortage we are seeing. Our processes require a long lead time, which depends on accurate forecasting to work well. When the forecasts fail, you additionally get huge knock-on effects because downstream products also get delayed, which delays additional products.
It's incredibly efficient, nobody is denying that, but what can also not be denied is that incredibly fragile.
> If the demand for stone suddenly rises to a point where much more walls and concrete is demanded, you get a massive delay in the production line because the stone needs to get mined and transported and crushed and transported &c before it even reaches the wall factory.
That doesn't take long. And you'd have enough walls as a finished product to wait out that small delay. (A tiny percent of what you'd have if you tried to buffer the full supply.)
> It's not entirely dissimilar to the chip shortage we are seeing. Our processes require a long lead time, which depends on accurate forecasting to work well.
The thing making the chip shortages so bad and hard to catch up is that we don't have enough manufacturing capacity. For both chips and the supplies they need. Buffers would not help much, because all the spare capacity we had wouldn't have filled them very far, and then they would have quickly drained back to leave us exactly where we are.
If you want to handle longer term disruptions then you need to have more factories, not more warehouses.
I argue that your style of buffering causes the delays we see.
If Ford hoarded 1 year of chips, not only would Ford not be making cars, nor would anyone else be making cars. Every single chip made last year went into a car: and pretty much every car was sold.
We are limited at the chip manufacturing level. The only solution is to make more chips. This process of spinning up chip production takes months to years.
Blaming JIT for showing us the answer is backwards.
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That being said: we do have substantial buffers where it counts: dealership lots. We don't actually have a car shortage yet, just a dramatic increase in car prices. We're all looking ahead to the future to see a lack of production because we're actually more forward looking than we give ourselves credit for.
It's not entirely dissimilar to the chip shortage we are seeing. Our processes require a long lead time, which depends on accurate forecasting to work well. When the forecasts fail, you additionally get huge knock-on effects because downstream products also get delayed, which delays additional products.
It's incredibly efficient, nobody is denying that, but what can also not be denied is that incredibly fragile.