The COVID-19 pandemic led to severe shortages of raw materials. This is still the case today, causing a steep increase in raw material prices. In addition, the problems in international container shipping seem to continue for the time being. The resulting supply and demand imbalance is forcing many companies to rethink the design of traditional supply chains. In order to cope with future crises, a high degree of flexibility is now demanded from all chain partners.

Just-in-Time or Just-in-Case?

The just-in-time strategy was frequently applied in supply chain management before COVID-19. Just-in-time, abbreviated as JIT, is a term that comes from lean manufacturing. In this strategy, the raw materials are only received if they are needed for the manufacturing process. This minimizes inventory and increases efficiency. Customers and chain partners are also supplied just in time, at the lowest possible cost. JIT has proved to be an effective strategy for more than 40 years. Until COVID-19 broke out.

It suddenly became clear that the just-in-time strategy is vulnerable to imbalances between supply and demand. That is why many companies are now choosing to increase their inventories just-in-case, JIC. By working closely together with all chain partners, these companies increase their flexibility: they can also guarantee short lead times in future crises. In addition, business opportunities can be responded to more flexibly in the post-COVID era.