Collaborating with suppliers at every tier of the supply chain improves financials and could ensure your survival in the next great disruption.
Most supply chain disruptions have negative financial effects. The COVID-19 pandemic made this clear to acquisition and supply chain professionals and academics across the globe. Business professionals have blamed the losses on the move to just-in-time (JIT) supply chains.
It’s a fair argument. The JIT philosophy calls for suppliers to deliver components to the production line just as they’re needed. The objectives are twofold. Reduce the amount of inventory sitting in the supply chain and put working capital into production rather than building up surpluses.1 As a result, JIT leaves manufacturers open to risk when supply chains no longer flow. However, blaming JIT alone is overly simplistic.