Just in Time - Just in Case

Just in Time…Just in Case

Nearly a year ago the Financial Times posted an article titled “Companies should shift from “just in time” to “just in case”. The article focused on the impact Covid-19 has had on supply chains and how in the pursuit of ever greater efficiencies, companies sacrificed robustness, resilience and effectiveness. Preordering supplies and rapid inventory turnover is a common, established business model throughout many industries.  However, many of us also understand having inventory on our shelves for a prolonged period can prove to be an expensive endeavor should one’s projected sales not materialize. Furthermore, waiting for supplies to arrive “just in time” so one can fulfill an order can be as risky for one’s business and, more importantly, damaging to a customer relationship. What the global pandemic made very clear is the need to balance efficiencies with a pragmatic outlook; a more “just in case” approach.

           Throughout my career I can recall four major events which had a significant impact on businesses. Some truly unanticipated, others brought about by poor planning and/or the lack of oversight. The attacks on September 11th, 2001 and the Covid-19 Pandemic are two events no one could have anticipated nor have had advanced preparation to manage. However, the Dot.Com Implosion of 2000, and the Great Recession of 2007-09 had many signals indicating there may be problems on the horizon. The lessons learned from these events highlight the need to develop planning guidelines for the unknown, which I believe means committing to a series of disciplines. Chief among these disciplines are the capacity to remain agile, the ability to pivot, and the need to have clear and consistent communications with suppliers, customers and employees.

           The Financial Times article indicated companies should aim for what Nassim Nicolas Taleb has called an “antifragile” approach, which says, going beyond resilience and robustness so one can adapt to, and even thrive on disorder. At the height of the Great Recession it became clear to our management team that further investments in our service offerings would be the more prudent approach in solidifying the future of the business. Communicating our decision to the employees marked a seminal moment for the company and also let our customers know they had a partner they could count on to fulfill their business needs well into the future. It is safe to say we can expect future unanticipated events affecting businesses and challenging established disciplines. While transitioning from a “just in time” model to a “just in case” does come with risks, I think one can be better prepared for those unanticipated events by consistently adhering to a set of practical guidelines. Over my career I’ve always held on to the premise… I cannot always control the cards I am dealt, but I can decide how to play them.