The world’s largest shipping line Maersk is encouraging a “just-in-case” supply chain model as fallout from the COVID-19 pandemic continues to impact the world’s supply chains.
The comments were made during The Council of Supply Chain Management Professionals (CSCMP) annual State of Logistics Report presentation with supply chain executives on major forces shaping logistics in the pandemic and post-pandemic world.
“Just-in-time is not sustainable these days. Just-in-case supply chain models with inventory buffer ensure sales demand can be fulfilled,” said Matthew Hill, head of Maersk North America’s Import business. “Customers are trusting us with a wider part of their supply chain to focus more on shipment level performance instead of container level.”
First adopted 1970s, “just-in-time” is an inventory management strategy that increases efficiency and reduces inventory costs by receiving goods only as they are needed. While efficient, the strategy requires predictable and accurate forecasting, something that is anything but certain in the supply chain these days between port congestion, a shortage of shipping containers, soaring freight rates, and major incidents like the Ever Given or South China’s Yantian port crisis.
The Council of Supply Chain Management Professionals, established in 1963, is an organization whose mission is “to advance the supply chain profession by connecting, educating and developing the world’s supply chain management professionals throughout their careers.”
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