[Music] toilet rolls petrol microchips we've run out of all of them in the last couple of years but it's not like products aren't being made and it's not like there's nowhere to store them so why do we seem to be running out of everything in the last 50 years the way we make and store goods to meet demand has turned on its head largely thanks to this man toyota executive taiichi ohno traditionally companies stored enough stock to meet current demand but also kept an extra amount in case there was a problem or a sudden increase in demand for their product this was called just in case but in the 1970s ono realized that storing excess parts and components cost toyota money so he devised a system where instead of storing parts the company only ordered what was needed making sure that parts arrived just in time the moment they were required and so just in time was born the results were spectacular just in time increased toyota's profits and freed up enormous amounts of capital that had been tied up in expensive warehousing this enabled toyota to reinvest expand and stay ahead of the competition today just-in-time systems are everywhere from supermarkets to our health services and from airplanes to motor vehicles as almost every area of business have gone in search of the spectacular efficiencies that just in time systems promise but there are limitations within the system that make it really quite fragile there are two main ways that a just-in-time system can go wrong firstly if a problem occurs anywhere in the supply chain such as materials not arriving when they're needed then because there's no excess reserve supplies the production simply stops and secondly if there is a spike in demand at any time because again there's no stockpiled goods the business cannot respond to the surge the covert 19 global pandemic really laid bare the fragility of the just-in-time system where businesses around the world saw anomalies in both supply and demand on a local level the toilet paper shortage we saw at the start of the outbreak was a spike in demand caused simply because toilet paper is a bulky and low profit item that supermarkets don't want to waste money storing so when some people bought just one more pack than usual or in some cases a lot more shelves emptied quickly and they stayed empty until the next scheduled delivery on a global level the online spending sprees that many of us went on during lockdown also created a spike in demand for goods and this is continuing to put additional pressure on an already overstretched shipping industry the reason that something as basic as shopping sprees can have an impact on a global transport network is because the shipping industry is a finely balanced system that has come to be dominated by just in time for example a just-in-time supply chain might see raw materials leave australia and get supplied to china for specialist refining which are then supplied to germany for manufacturing which are then supplied to retailers all around the world including back to australia so when a problem occurs anywhere in that chain such as multiple chinese ports closing because of covert then the entire system quickly backs up in nearby shanghai are also seeing the worst congestion in at least three years just in time relies on smooth running throughout the supply chain so if companies are suddenly faced with changes like spending time filling out more forms as has happened with brexit then the result is unfulfilled orders and empty shelves the global supply chain is struggling just in time has spread to every aspect of our lives including areas where it's not suited in the armed forces it led to a lack of flak jackets and machine guns during the iraq war and in the nhs just-in-time supply of ppe failed during the pandemic leaving thousands of medical staff unprotected it's even infiltrated job recruitment which is eroding labor rights so if just in time isn't working out surely we can go back to the way things were right well companies are starting to slightly increase their infantries spreading risk by having backup suppliers and using technology to manage bumps in the supply chain but it's not easy to make the switch just in time simply out competes other systems when it comes to efficiency but there is one thing that could force companies to return to just in case and that's the climate crisis where just in time will likely find itself unable to keep up with the pace of change making at least a partial return to a justin case system almost unavoidable as companies face up to an uncertain future you