Opinion: Rethink the 'Just-in-Time' Delivery System



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 Updated:
5/23/2011 8:00:00 AM

By Julian Keeling
Chief Executive Officer
Consolidators International

This Opinion piece appears in the May 23 print edition of Transport Topics. Click here to subscribe today.

Fewer than five months into 2011, New Zealand and Japan have been slammed by powerful earthquakes that in Japan’s case also led to a killer tsunami and potentially deadly damage to a nuclear power plant.

Turmoil has erupted in the Middle East with seemingly solid regimes falling and civil war breaking out, while the United States and Europe have experienced unusually cold winters. There has been “slow steaming� on the world’s shipping lanes, all-freighter flights have been reduced or eliminated, and the shortage of qualified truck drivers is back, partly in reaction to the Federal Motor Carrier Safety Administration’s new Compliance, Safety, Accountability program.

Clearly, the $1 trillion international transportation industry faces some formidable obstacles today, and no delivery system is as thoroughly exposed to these negative developments as the much-ballyhooed “just-in-time� (JIT) method of moving goods both domestically and around the world.

JIT was first introduced in the early 1980s and quickly spread to the trucking industry — a shipper’s dream come true. It reduced inventory to a minimum, saving substantial money while at the same time increasing production efficiency. Little wonder that JIT became the standard logistics system for land, air and sea transportation throughout the industrialized world.



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Global political, economic and social conditions, however, have changed fundamentally in the 25 years since Japanese automaker Toyota developed JIT and began receiving parts under that system. Truck makers and parts distributors no longer live in a sane and peaceful world. Who would have thought the Egyptian government, seemingly as immovable as the Pyramids, could be overthrown in less than two weeks? Or that many people in oil-rich Libya — with its “dictator for life� and no history of free expression — would embrace democracy almost overnight?

Even nature seems to be conspiring against us. Ironically, Toyota, the first major supporter of JIT, found itself having to cut production at its North American plants by 75% after the March 11 earthquake and tsunami in Japan forced the company to conserve its limited supply of parts made in that country.




© 2010, Transport Topics Publishing Group. All rights reserved.

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