Something to Think About

[gary_in_neenah]

Has anyone else come to the conclusion that inventories are being kept at a minimum by intent. I'm referring to what's been called J.I.T. as in Just In Time. Almost all of manufacturing have been doing it for years and then Covid threw a Monkey Wrench into the system. Many on here are still waiting or just receiving their preordered toys, trucks, and just about everything else. We know that the driving force behind J.I.T. is that warehousing is expensive. Could it be that this is the way we'll make purchases in the present and future? They'll only build what's been ordered? I've noticed the local car dealers are advertising for you to order the vehicle THAT YOU REALLY WANT. Rather than have their lots full of vehicles that eventually will be sold, they'll sell everything as pre-ordered. And then they could put up another Starbucks where the car lot used to be. Sorry, my sarcasm is showing.

I'm thinking this Supply Chain story/theory is/was a real thing but when the CEO's and Bean Counters saw they could make a buck by doing things this way they said, Why Not? Something to think about as we watch the snow melt.

 

[old abe]

Has anyone else come to the conclusion that inventories are being kept at a minimum by intent. I'm referring to what's been called J.I.T. as in Just In Time. Almost all of manufacturing have been doing it for years and then Covid through a Monkey Wrench into the system. Many on here are still waiting or just receiving their preordered toys, trucks, and just about everything else. We know that the driving force behind J.I.T. is that warehousing is expensive. Could it be that this is the way we'll make purchases in the present and future? They'll only build what's been ordered? I've noticed the local car dealers are advertising for you to order the vehicle THAT YOU REALLY WANT. Rather than have their lots full of vehicles that eventually will be sold, they'll sell everything as pre-ordered. And then they could put up another Starbucks where the car lot used to be. Sorry, my sarcasm is showing.

I'm thinking this Supply Chain story/theory is/was a real thing but when the CEO's and Bean Counters saw they could make a buck by doing things this way they said, Why Not? Something to think about as we watch the snow melt.

Yeah, well, LOL, as several years ago when I went to order my truck, most dealers didn't want anything to do with "spec ordering". They would like to just "find" you something you would accept. That' not how I do it. I discovered the dealers who would "spec order" had much more knowledgeable people working at their dealership.

 

[whitedust]

Auto industry isn’t going to get any better soon. Government is pushing EVs and just aren’t any yet. I’m perfectly happy with my ice vehicles and every vehicle I ordered since 99 was a spec order. My vehicles are good don’t need one for years to come. Price ain’t right see ya. Lol.

 

[heckler56]

I think you have to segment it by industry. Auto taking the approach of “spec” your vehicle I suspect because they built massive inventories before shutting down. You spec what you want and they finally get a chip and move it through the parking lot of vehicles sitting and set for delivery once they can arrange transport. I asked my locale dealer how bad his year was in 2021, mind you he only had two new vehicles on the lot, he said it was by far the best year ever. Why, they paid $0 inventory as vehicles sat in port. People came to the dealership, spec’ed what they wanted, once dealer got a truck full they tried to find a trucker and brought it in. So auto is transitioning to the internet for new sales like Carvanna, etc.

 

[favoritos]

We used to joke about how easy it was to reduce inventory. We just put in on a truck.

I'd love to spec out vehicles. I'm sure we all love the idea. I wish it was easy. The process has further timeline extension because of the "truck" inventory. I emphasize that term because it covers the procedural portion of building products. It's not like the old days when you needed a widget for the next doohickey coming down the line. In the old days, you went out to the "warehouse" and grabbed the widget. Life was good for the assembly line and the consumer. The company owner hoped like heck that all the widgets were gone by the end of the year. It was risky for the company and it was their money. Warehouses full of widgets didn't make money.

J.I.T. was the answer to reduce risk. The flaws in that process are showing up with "Slow trucks". It's been tough on production systems. The buildings, machines, workers, and consumers, all waiting for the "truck" to show up with widgets is not good for business either.

I agree, it is a good time to take a new look at the process. Every one of us is a consumer. Every one of us is also involved in some way, shape, or form, of making doohickies with widgets.

Can we build spec vehicles and toys? WE sure can. Will we? I sure hope so.

 

[BigSix]

One of the things you have to look at is the stock market. Throughout the pandemic for the most part, the market did tremendous. Most companies did great during the pandemic. Less inventory, lower costs, lower taxes, sometimes staff laid off and they could charge higher prices because of the labor shortages, supply chain issues and component/raw material price increases. A perfect formula for greater profits! I don't think many companies' managers will want to turn back.