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Fear the Unexpected for Which One Has Refused to Prepare


There is significant merit to the approach of JIT manufacturing. Yet it needs to be modified to recognize that supply chain issues are inevitable, and we need to be prepared for them. Critical components need to be sourced from multiple suppliers, and some level of surplus is prudent, given the huge downside if you are not prepared for the unexpected. For the auto industry, it’s a $20 billion problem, and the number keeps growing. What that number does not reflect is the long-term impact on the industry’s customer base concerning the products that the customer base had considered to be perpetually conveniently accessible.

Amazingly, we have some excellent examples of preparations. One of them is Waffle House, which is known for the fact that it has backup generators in every store. When major events happen, and everyone else is closed, Waffle House restaurants are open for business. The franchise realized the investment in generators results in a lot of additional business. That is of course a rare occurrence, but the customers know that no matter what, the Waffle House will be open at any time. Imagine if Ford Motor Co. had stockpiled computer chips: It would have reaped the benefits of having this product when no one else did. Waffle House is a private company and is able to think long term, versus today’s public company, which is laser-focused on how every decision will affect tomorrow’s stock price.


Currently, there is a movement to encourage people to come back into the office 5 days a week. What COVID proved was that for many jobs, there is no need to be in the office 5 days a week. Many employees found that the lack of commuting made them more productive, improved their quality of life, and helped take the sting away from the higher cost of driving to the office. Those companies that continue to force their employees back into the office will find the labor shortage getting more acute as they lose people to competitors who have figured out how to leverage at least a partial remote workforce. For other companies, the need to automate will become more urgent as a way to relieve some of the burden caused by the labor shortage.

It is clear that technology exists today to ensure that a remote worker remains optimally productive, and companies need to adapt or face the consequences.

As the obvious impacts of the pandemic slowly fade away, we need to learn its many lessons. Supply chains will fail, and those failures could linger for many months. Climate change is altering the nature of weather and that has potential to impact the supply chain. Political instability is a reality and will impact the supply chain. Critical supply chains need to be redundant and geographically dispersed. A few meat-packing plants or faculties that produce baby formula are not in the country’s best interest. It’s in the nation’s best interest to ensure that a certain percentage of medical supplies and lifesaving medicines are produced within the U.S. and a handful of trusted countries.

Otherwise, we are doomed to live the reality of the wisdom of Ellen Mary Challans words: “There is only one kind of shock worse than the totally unexpected: the expected for which one has refused to prepare.”

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