Originally Posted by
PaulS
JIT for those that depend on it, needs a well oiled and functioning global supply chain. It was working quite well, until COVID-19 hit and all went to crap....
Let's say you have a small Mandolin shop, you make 3 instruments a year, and repair a bunch of older ones. You go through a dozen sets of tuners each year, you don't hold a lot of inventory, when you get down to 2 sets in the box, you order another box of 6 from your supplier. It's been this way since you started in the 1980's, back then you called the sales guy "Mike" who then took your order over the phone, and sent them by UPS the next day, you would have them in a week. Mike retired years ago, now you go to the website, and order them. These tuners come from a company in say Seoul, South Korea.
Now we need to go back a few months, to when your distributor ordered a new pallet of tuners from the factory. they had a run of COVID at the factory, and shut down for six weeks, then they made and shipped the tuners, this went by truck to the port at Inchon, where a logistics carrier would normally put it in a container with about 40 pallets of other stuff, destined for the USA. The port now got shut down, due to COVID for 4 weeks, then they ran out of containers, and had to wait for 8 more weeks for more containers, it finally got loaded, but there is a backlog of stuff and the container sat at the port for 9 more weeks waiting for the backlog to clear. Finally the 2 week journey by ship, only to get to the port of LA, where a shortage of truck drivers, meant the container is still sitting on the dock, waiting to go to the logisitics company be broken down, it will be another 10 weeks before pallet of tuners arrives at the distributor.
So the tuners you ordered 5 months ago, and normally take a week to come, will be 7 1/2 months late, meanwhile you used your last set on a repair a month ago, and you have a couple of instruments that will be finished this week, except you don't have tuners..... That means you will not get paid for those instruments, and your line-of-credit is starting to look like a Mortgage.....
It's more then a labour problem, it's a cascade failure of the global supply chain, this would not happen if the distributor was a manufacturer, making the tuners domestically, because even if you had the factory shut down for 6 weeks due to COVID, you would have had them months ago.
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