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Signs of the beginning of the breakdown of JIT distribution.

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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby kublikhan » Tue 11 Aug 2009, 01:02:17

$this->bbcode_second_pass_quote('the48thronin', 'I') have been on the phone today with several people all of whom brought this subject up themselves NONE of whom read this discussion. One is the GM of a major agricultural machinery outlet in the upper Midwest who was explaining to me the difficulty he is having acquiring the necessary parts load he predicts he will need for the coming harvest season.

His remarks were all about which parts were outsourced by the manufacturer and have been unavailable since last NOVEMBER when they ordered the parts load for this years harvest. His stark assessment was that in several brands of agribusiness machines, there will be critical parts not available because the manufacturer themselves cannot get the parts from their suppliers who also were running JIT based inventory. We made several conference calls to the people we each knew investigating further and he is right.. several major suppliers who all were JIT suppliers are not going to be able to meet the needs of even the manufacturers much less the parts for repairs at major distributors.
As far as I can tell, the shortages in farm machinery were caused by the sharp increase in demand for them, not by a breakdown in JIT distributation. The rising food prices last year caused increased demand for food and the machinery to grow/harvest/process it. Likewise, increased demand for biofuels had caused a further increase in demand for farm machinery. As the credit crunch and economic downturn continue to hit all businesses, demand is slacking in the farm machinery business as well. This is easing those record long waiting lists. Instead, orders are dropping off and profit margins are getting squeezed. With demand dropping off, I am just not seeing the epic shortage in the farm machinery business that you see.

$this->bbcode_second_pass_quote('', 'M')any analysts expect 2009 to continue the painful economic conditions that closed out '08. Now, these general macroeconomic woes are starting to extend into the farm machinery marketplace. It's coming in the form of lower demand, driven in part by cancelled machinery orders, say Agriculture Online Machinery Talk members and farmers who are starting to see a change in a market that, just months ago, had such high demand that waiting lists for some new pieces of machinery were a year long. Now, economic stress has that demand ebbing and the marketplace rapidly changing.

"I have a good friend that is in the equipment business. He says a lot of his customers are hinting they want out of some of the tractors and combines they ordered in the summer"

But thus far, the majority haven't sought this course of action, at least domestically, says Machinery Pete. But, looking beyond U.S. borders, it's easy to see that a trend may not be far off.
Economic dire straits reaching into farm machinery business
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby kublikhan » Tue 11 Aug 2009, 01:28:49

$this->bbcode_second_pass_quote('the48thronin', 'L')et's see superbig company a ( roadway) has a driver claiming they laid too many people off and he is working overtime... try google search YRC and union in talks over retirement. There are only so many assets you can sell and the rent from the new owner no matter how big your multi national trucking company is. YRC has used up that dodge.. There is only so much you can demand from workers, YRC has used up that dodge. The government could take control of a company the size of YRC, but then the great wides of the world would also be going belly up and taking control of great wide gives you nothing because they do not own any assets to use, they contract them from people who will be gone out of business by then.
As I mentioned in your doomers thread, I don't see a few of the weaker companies going bankrupt as a sign of a breakdown of JIT transportation. Even in the unlikely event that YRC completely ceased all operations, others would take their place:

$this->bbcode_second_pass_quote('', 'Y')RC’s freight is being actively solicited by its competitors as they offer shippers a “safe haven” from a potential bankruptcy or chapter 11 filing.

ABF, long one of the best performing long haul carriers has hired a consultant to help them seek out potential acquisition candidates. For those companies with strong balance sheets, this is a time to add density at an attractive price.
The Challenging World of LTL Freight in 2009

I don't like the current far flung system of distribution though. The whole 3000 mile ceasar salad is very wasteful. That's why I found the article that Wisconsin_Cur posted to be excellent news. Shifting from a global supply chain to a regional one is the right move to make in a world where energy costs are going to continue increasing. Those that are behind the curve on moves like this are going to get passed and/or swallowed up by those businesses with a little more foresight.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby the48thronin » Tue 11 Aug 2009, 02:31:19

$this->bbcode_second_pass_quote('Caffeine', 'S')eems a little weird that toilet paper, of all things, should be so scarce on the shelves in that slideshow. It's not perishable, like meat, nor does it become out of date like magazines.

What's the product in slide 8, where the shelves are pretty thin? Wheat stuff, sugar stuff?



sugar
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby the48thronin » Tue 11 Aug 2009, 02:36:37

just as a matter of discussion, that single brand of toilet paper still in stock is made less than 200 miles away.. as were the paper diepaers.. those products transported from farther away were out at the dc or they would have been restocked already.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby Novus » Tue 11 Aug 2009, 02:40:57

I continue to call BS on any of these so called signs of JIT breakdown. Went to the supermarket just today. Everything normal. Supermarkets won't close because they ran out of supply but because they ran out of customers.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby JJ » Tue 11 Aug 2009, 08:51:10

I think one of the unintended consequences of JIT is the speed at which the store shelves will empty if/when there is a crisis. I work in a small (33,000) square foot grocery store. At any given time, there is a smattering of customers spread throughout the store (except at rush times, like after work). But what the customers don't realize is that we are feeding 10,000 people a day. Even the store director said JIT is a big mistake. We will be gutted in a few hours. When hurricane Rita and Ike came through Louisiana/South Texas, our shelves were empty is a few hours and the refugees were having fistfights in the bread isle over the last few loaves of bread, and the actual event was 700 miles to our east. I see that as a precursor to a real crisis. Have you ever been to a piggery? Humans are really no different.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby Maddog78 » Tue 11 Aug 2009, 09:04:02

$this->bbcode_second_pass_quote('the48thronin', 'o')h and at almost the same time my daughter called me distraught from home and then sent me the following three shots from wally world there.




Distraught? Now you got your kid all freaked out, too?

Just went grocery shopping last night in fact. Store very well stocked.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby vision-master » Tue 11 Aug 2009, 09:34:32

$this->bbcode_second_pass_quote('JJ', 'I') think one of the unintended consequences of JIT is the speed at which the store shelves will empty if/when there is a crisis. I work in a small (33,000) square foot grocery store. At any given time, there is a smattering of customers spread throughout the store (except at rush times, like after work). But what the customers don't realize is that we are feeding 10,000 people a day. Even the store director said JIT is a big mistake. We will be gutted in a few hours. When hurricane Rita and Ike came through Louisiana/South Texas, our shelves were empty is a few hours and the refugees were having fistfights in the bread isle over the last few loaves of bread, and the actual event was 700 miles to our east. I see that as a precursor to a real crisis. Have you ever been to a piggery? Humans are really no different.


I believe what you say over that of the well feed sheeple ppl nay-sayers.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby ki11ercane » Tue 11 Aug 2009, 11:08:00

$this->bbcode_second_pass_quote('the48thronin', '')$this->bbcode_second_pass_quote('Caffeine', 'S')eems a little weird that toilet paper, of all things, should be so scarce on the shelves in that slideshow. It's not perishable, like meat, nor does it become out of date like magazines.

What's the product in slide 8, where the shelves are pretty thin? Wheat stuff, sugar stuff?



sugar


The shortness of sugar is another issue in itself and has nothing to do with JIT at all. With less than wet conditions in India this growing season where a majority of the sugar for the world comes from, their harvest for this year is down more than 30%. This creates a commodity fight between candy and ethanol. This is going to produce an increase in the price of candy and soda, and an increase in the price of sugar.

Nothing to do with JIT at all.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby ki11ercane » Tue 11 Aug 2009, 11:20:00

$this->bbcode_second_pass_quote('JJ', 'I') think one of the unintended consequences of JIT is the speed at which the store shelves will empty if/when there is a crisis. I work in a small (33,000) square foot grocery store. At any given time, there is a smattering of customers spread throughout the store (except at rush times, like after work). But what the customers don't realize is that we are feeding 10,000 people a day. Even the store director said JIT is a big mistake. We will be gutted in a few hours. When hurricane Rita and Ike came through Louisiana/South Texas, our shelves were empty is a few hours and the refugees were having fistfights in the bread isle over the last few loaves of bread, and the actual event was 700 miles to our east. I see that as a precursor to a real crisis. Have you ever been to a piggery? Humans are really no different.


No matter what kind of unintended consequence we get, grocery stores have at the most 3 days of product on their shelves. They are the epitome of JIT. If some sort of disaster happens (hurricane, massive fires, earthquake, etc.) grocery stores empty and it has happened several times.

The crisis being talked about here is not sudden or overnight. It's slow and calculating. The breakdown of JIT as we know it today won't take week/months. More like years/decades. One of major problems of "preparing" I am starting to realize is people concentrate more on "the now" rather on "the future" in regards to this issue. This blinds you to what you need to do to mitigate your situation in the future by panicking over the now. This situation seems to be more people worrying that their 50 brands of bread won't be in the store this afternoon to pick up a loaf of after work rather than planning on how to make bread 5-10 years from now when the JIT system or any system of regular reliable product that brings the bread to you is gone.

Start to worry when there is no bread for a day. Be concerned when there is no bread for two days. Panic when there is no bread for three days. Right now, I am not even on the "worried" scale for "today." I could give two sh!ts about it today because there is no sign around me or anywhere within 3000km west or east of me of any problems. So for now, I am preparing for the future and not worrying about the present. When the present comes to meet the future I am concerned about, then I will start to worry.

What's funny about all of this is even with ammo and guns, there isn't even a JIT issue there either here. (lots of 9mm and .223 in my local sporting goods stores and major gun dealers here in Canada)
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby TWilliam » Tue 11 Aug 2009, 11:29:13

$this->bbcode_second_pass_quote('', '&')quot;All that go-go 1990s where we were adding items in and adding items in, and people wanted more, more, more, more choice... just didn't pay off"

Riiiiiight. That's why they kept on doing it right up until last year, because it "just didn't pay off". Funny how every market chain in the country just happened to figure that one out at the same time. Nice spin doctoring there... :roll:

You know, I love how some people in this thread think they know so much more about what's going on in the transport industry than someone who works in it. Keep it comin' Ronin. Some of us are grateful for the view beyond the lipstick...
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby kublikhan » Tue 11 Aug 2009, 12:17:15

$this->bbcode_second_pass_quote('TWilliam', 'R')iiiiiight. That's why they kept on doing it right up until last year, because it "just didn't pay off". Funny how every market chain in the country just happened to figure that one out at the same time. Nice spin doctoring there... :roll:

You know, I love how some people in this thread think they know so much more about what's going on in the transport industry than someone who works in it. Keep it comin' Ronin. Some of us are grateful for the view beyond the lipstick...
:/ Do you really think a store trimming back on the 88 different types of shampoo they carry is a sign about a collapse currently underway in JIT distribution? I keep hearing about reduced demand, shrinking profit margins, building inventory. All of these things factor into the decision to scale back on the variety of items carried. So no, I don't think it is a coincidence that this is happening during a downturn. But a sign that JIT distribution is unraveling? No, I don't think so.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby ki11ercane » Tue 11 Aug 2009, 12:23:18

$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('JJ', 'I') think one of the unintended consequences of JIT is the speed at which the store shelves will empty if/when there is a crisis. I work in a small (33,000) square foot grocery store. At any given time, there is a smattering of customers spread throughout the store (except at rush times, like after work). But what the customers don't realize is that we are feeding 10,000 people a day. Even the store director said JIT is a big mistake. We will be gutted in a few hours. When hurricane Rita and Ike came through Louisiana/South Texas, our shelves were empty is a few hours and the refugees were having fistfights in the bread isle over the last few loaves of bread, and the actual event was 700 miles to our east. I see that as a precursor to a real crisis. Have you ever been to a piggery? Humans are really no different.


I believe what you say over that of the well feed sheeple ppl nay-sayers.


And therein lies the crutch of this issue. Belief vs. fact. Lots of people believe in lots of things, but that doesn't make them true or factual. Believing someone or some things over deciding what they say is true or what is factual based on factual empirical information is what separates something like science and religion and someone like a preacher and a scientist. Like Peak Oil, your beliefs are only going to be validated when they are proven with factual situations (the one, two, three day bread warning) and when the issue is in your rear view mirror. You will not see the breakdown of JIT coming, you will see it after it's hit.

Right now, the facts show the JIT system is nowhere near breaking down. Has the JIT system changed or evolved with our current economic situation? Absolutely! But it has not broken down. Or, if you want to refute that fact, on a scale of 1 to 100%, it's sitting at 2% broken down. (vs. say 24 months ago) Lots of social and economical process run on less than 100% strength. (in fact almost all of them do)

Just because someone chooses to rely on fact and empirical evidence vs. a "religious-like" desire for the wheels to come off doesn't make them sheeple or nay-sayers. Again, "wanting" the wheels to come off and dismissing free thinkers because they did the leg work and don't jive with you opinion is a waste of personal energy, which is not a victory for "believers."

Right now, I'll stick to the facts of today, and plan for the future. That's all I have to work with.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby Maddog78 » Tue 11 Aug 2009, 12:29:22

$this->bbcode_second_pass_quote('TWilliam', '
')You know, I love how some people in this thread think they know so much more about what's going on in the transport industry than someone who works in it. Keep it comin' Ronin. Some of us are grateful for the view beyond the lipstick...



Yeah, keep it coming but you think ronin is the only one who works or knows someone who works in the transportation industry?
I or people under me contract trucks on a near daily basis.
My brother in law is a manager for one of the largest trucking companies in Western Canada.
I look to more than just this thread for problems in JIT ditribution.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby TWilliam » Tue 11 Aug 2009, 14:10:32

$this->bbcode_second_pass_quote('kublikhan', 'D')o you really think a store trimming back on the 88 different types of shampoo they carry is a sign about a collapse currently underway in JIT distribution? I keep hearing about reduced demand, shrinking profit margins, building inventory. All of these things factor into the decision to scale back on the variety of items carried. So no, I don't think it is a coincidence that this is happening during a downturn. But a sign that JIT distribution is unraveling? No, I don't think so.

If the prime motivation is reduced demand and shrinking margins, then places like Wal~mart typically reduce quantities, not variety. Variety is a big selling point. I've noticed the reduced inventories at my local Wal~mart, and I've engaged some of the employees in conversation about it. In no instance have they told me they've discontinued carrying anything I note missing. What they tell me repeatedly in so many words is that they're having 'supply issues', and at least one was aware enough of things to mention specifically the impact of the credit crisis on trans-oceanic container shipping, which is part of the JIT system.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby RedStateGreen » Tue 11 Aug 2009, 14:34:32

$this->bbcode_second_pass_quote('the48thronin', 'A')nyone remember how this thread started? Do you wonder if by cutting number of different items stocked, and adding "temporary" storage behind the store wallyworld is able to do better at keeping the shelves full?

today I took 17 photos and put them in a slide show, if it doesn't scroll try clicking on the picture.

Image

That's how most of the stores in my area are these days, been like that for almost a year now, except one time I went to the local health food store (which is also a grocery) and 90% of a freezer section was empty. They claimed "the freezer broke", even though there were some items in there, no one was restocking (as they would be, frantically, if it was just turned back on) and the freezer seemed fine otherwise.

Sounds like a lot of people are in denial or want everyone else to be there too ... :lol:
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby TWilliam » Tue 11 Aug 2009, 15:18:11

Something else to note, especially with regard to Wal~mart, is that they are pretty much the masters of inventory tracking and control. It's how they came to dominate retail. You can pull any item off the shelf at any Wal~mart, and they can tell you how many of it sell not only in a year, not only in what month it sells the most, but what day and what hour of that day. They can also tell you the likely demographic and gender of the purchaser as well as what other items are likely to accompany it in the cart. Their system is entirely real-time. Before the last of any item even leaves the shelf the DC is already in the process of pulling replacement for that night's re-stock, based off of input from the cash register at the store. The only time Wal~mart gets 'caught short' is when there's an issue on the supply side...
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby kublikhan » Tue 11 Aug 2009, 15:29:02

$this->bbcode_second_pass_quote('TWilliam', 'I')'ve noticed the reduced inventories at my local Wal~mart, and I've engaged some of the employees in conversation about it. In no instance have they told me they've discontinued carrying anything I note missing. What they tell me repeatedly in so many words is that they're having 'supply issues', and at least one was aware enough of things to mention specifically the impact of the credit crisis on trans-oceanic container shipping, which is part of the JIT system.
Are you having trouble locating products that you want to buy at your local Walmart? Is that super glue you wanted to buy unavailable because it is stuck in a Chinese dock somewhere?
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby Serial_Worrier » Tue 11 Aug 2009, 16:04:48

BTW, my local Trader Joes has supply issues with shredded cabbage. Some weeks they have it, some weeks they don't. Also they've discontinued some of my favorite salsas. They have added a lot of new products, a lot of which I don't care for.
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Re: Signs of the beginning of the breakdown of JIT distribution.

Unread postby the48thronin » Tue 11 Aug 2009, 22:33:39

because there is a break in our freight, my wife and I are sealing both the floors in our trailers. Mine was started today hers will start tomorrow in the same shop. So we decided to revisit the same wallyword store I shopped at yesterday, ( and we will probably do so again tomorrow and the next day.

Today I shot 51 pictures,

Image

I noticed one of the bread trucks did not make his delivery today, so they spread the other bread across most of the empty shelves, The paper section I did not shoot yesterday I took care to shoot, there was about 1/2 of the stock they plan to have on hand.

meat was almost out, and the associates had just dressed the meat to make it look full. same with the produce where they were spreading the melons and the potatoes out to cover the missing peppers, yams, and lettuce. I asked the associates if they were waiting on a truck from the dc by claiming we were parked behind the store and didn't want our truck to interfere if he was due, and was told their daily truck had already been unloaded and all stocked already, nothing due in till 10 am tomorrow.

I mentioned the lack of meat and was told that was a problem since Friday as the DC was shorting orders because of short supply at the DC.

My daughter does not go to town every day, but will return to look into our local wallyworld Friday afternoon when the stock is usually maximized hoping to find the items she could not get yesterday. As I had never told her about the pics I had been taking, I was surprised to see her reaction yesterday. She is used to being able to hit the larder at home not the store.
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