Inventory became evil decades ago. “Just In Time” logistics became the norm instead of having warehoused inventory on hand. The beancounters all decided inventory was money that was sitting around not doing anything and maintaining the warehouse space cost more too. Can’t have those costs on the balance sheet. So speed in receiving smaller shipments more often is now the norm, along with ordering when you need them instead of ordering ahead of time, because some beancounter isn’t gonna be happy about extra inventory.
The beancounters are right about the costs. What they’re not right about is the risks. JIT supply chains are much more fragile, and to achieve some degree of resiliency, even sophisticated manufacturers will often mantain stockpiles of some critical goods. And things get even more funky when there’s only one good supplier for something, or the cost of switching suppliers is high.
Inventory became evil decades ago. “Just In Time” logistics became the norm instead of having warehoused inventory on hand. The beancounters all decided inventory was money that was sitting around not doing anything and maintaining the warehouse space cost more too. Can’t have those costs on the balance sheet. So speed in receiving smaller shipments more often is now the norm, along with ordering when you need them instead of ordering ahead of time, because some beancounter isn’t gonna be happy about extra inventory.
The beancounters are right about the costs. What they’re not right about is the risks. JIT supply chains are much more fragile, and to achieve some degree of resiliency, even sophisticated manufacturers will often mantain stockpiles of some critical goods. And things get even more funky when there’s only one good supplier for something, or the cost of switching suppliers is high.
as these tariffs start kicking in, companies are really going to regret not having local inventory.
It’s always the fucking accountants.