Don’t Abandon Just-in-Time

Just-in-time (JIT) supply chains have long been the gold standard for efficiency. They minimize waste, reduce holding costs, and ensure that materials flow seamlessly from supplier to production to customer.

But the world has changed.

Pandemics, geopolitical instability, and material shortages have exposed JIT’s vulnerabilities.

Does this mean JIT is obsolete? Far from it. The answer isn’t to revert to just-in-case (JIC) stockpiling, which bloats costs and reduces agility. Instead, forward-thinking companies are evolving JIT into something smarter: a buffered JIT system that blends efficiency with resilience.

This is how Toyota and Volkswagen are adapting, and how companies across industries can follow suit.

Fukushima Story How Toyota Modifying JIT

When Toyota pioneered JIT, their production ecosystem was localized. Suppliers and factories were clustered together, allowing real-time coordination and minimal delays. As JIT expanded across global supply chains, it still worked because trade was stable, logistics were predictable, and disruptions were rare.

That world no longer exists.

Semiconductor shortages, factory shutdowns, and shipping crises have forced businesses to rethink their lean operations. Some are retreating into old-school stockpiling, hoping that warehouses full of inventory will protect them from disruptions.

Toyota learned this lesson firsthand. After the 2011 Fukushima earthquake, they identified 500 critical components (including semiconductors) and required suppliers to maintain strategic stockpiles of two to six months based on lead times. When the 2021 global chip shortage hit, Toyota continued production while competitors, Volkswagen, Ford, and General Motors scrambled for supply.

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Volkswagen, instead of stockpiling batteries, is now building battery factories to insulate its JIT supply chain from future disruptions. This approach of buffering instead of hoarding is the model for modern supply chains.

How to Build a Resilient JIT Supply Chain

JIT doesn’t need to be abandoned; it needs to evolve. Here’s how companies can redesign their JIT supply chains to balance efficiency with resilience:

1. Map the Entire Supply Chain, Not Just Tier 1

Most companies know their direct suppliers. But the real risk lies two, three, or even four tiers upstream, where disruptions often originate. During the pandemic, companies like Toyota and Western Digital, which had already mapped their lower-tier suppliers, were able to respond weeks ahead of competitors.

Supply chain mapping isn’t just about visibility—it’s about predicting weak points before they become critical failures.

2. Identify What Can Stay JIT, and What Needs a Buffer

Not everything in a supply chain is equally vulnerable. Some components have stable demand, synchronized production cycles, and short transit times—these can remain fully JIT. Others, with long lead times or exposure to volatile regions, need buffers.

The goal isn’t to abandon JIT but to segment supply chains and selectively add buffers where necessary.

3. Don't Stockpiles

A buffer doesn’t have to mean mountains of inventory.

Leading companies are using:

• Strategic stockpiles for critical components with long lead times.
• Flexible manufacturing capacity, allowing rapid shifts in production.
• Redundant suppliers in different regions to reduce dependency.
• Shared infrastructure of warehouses or logistics hubs used collaboratively by multiple companies.

For example, some companies are pooling spare parts across multiple product lines, rather than maintaining separate stockpiles. Others are designing parts with interchangeability in mind, reducing the need for excessive buffers.

4. Strengthen Supplier Relationships or Build Bigger Buffers

JIT assumes close collaboration with suppliers. But global supply chains involve a mix of collaborative and transactional relationships.

• If a supplier is a strategic partner, businesses can work together to maintain lean, synchronized inventory flows.
• If a supplier is less reliable, the company will need larger buffers to offset uncertainty.

Agility Over Excess

JIT isn’t the problem. The issue is rigid supply chains that don’t adapt to modern realities. Companies that succeed in the next decade won’t be those who hoard inventory. They’ll be the ones who:

• Understand their full supply chain, not just direct suppliers.
• Segment their supply chain, keeping JIT where it works and buffering where needed.
• Use technology to make decisions in real time.
• Strengthen supplier relationships or buffer against weak ones.

Supply chain resilience isn’t about having more it’s about being prepared.

And in today’s world, agility is the real competitive advantage.

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