Adapting to Supply Chain Shake-Ups With expert insight from Win Jeanfreau, Executive Director of iMpact Utah.
From bottlenecked ports in Los Angeles to labor shortages across almost every industry, the ripple effects of COVID-19’s impact on supply chains are evident and real. And unfortunately, there is no guaranteed return to business as usual anytime soon. So how can manufacturers adapt and stay competitive? Win Jeanfeau, Executive Director of iMpact Utah, offers key insights and takeaways for manufacturers looking to stabilize their supply chains and avoid disruptions in the future. It has been said ad nauseam that the pandemic has brought about unprecedented times. But Win Jeanfeau, a successful entrepreneur who is no stranger to optimizing supply chains, points out that there is some precedent we can learn from—specifically, the 2011 Tohoku earthquake and resulting tsunami in Japan. Much like the pandemic, the 2011 tsunami in Japan was an unforeseen disaster that not only killed thousands of people but devastated manufacturing supply chains too. Toyota, who had pioneered the just-in-time inventory (JIT) process, lost a vital chip maker in their supply chain. As a result, Toyota recognized the fragility of their JIT model. As a result, they reevaluated their supply chain philosophy, informed by this disruption. As a result of their evaluation, strategic reserves for certain elements of 25
their supply chain were identified and upper limits increased. One of the items identified as critical and difficult to replace were chips for the computers in their automobiles. Toyota created a surplus of computer chips so they would be ready to respond should they lose such a vital component of their supply chain again. Making JIT inventory more robust. Toyota’s preparation following the tsunami has now paid off. While most car manufacturers have had to slow or halt production due to the computer chip shortage brought on by the pandemic, Toyota has thrived. “They’re the only car manufacturer that’s been able to make cars in the last year because they had all the parts and pieces in strategic reserve,” Win says. “Nobody else did.” While disasters like tsunamis or pandemics have revealed the fragility of bare-knuckled JIT inventory, that does not mean JIT should be completely abandoned. Instead, Win refers to pre-tsunami JIT as being version 1.0 of a lean manufacturing approach. Now, Toyota has shown us version 2.0 of JIT—one that is more robust by implementing strategic reserves and empowering manufacturers like Toyota to weather the storm.
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