Issues associated with Pushup the Supply Chain when Implementing JIT
Issues associated with Pushup the Supply Chain when Implementing JIT
There are varied issues that can emanate from pushing risks up the supply chain when
implementing JIT. One of the issues is that the illusion that organizations have managed the
risks has often been overlooked, as well as the critical exposure along the supply chain.
Therefore, supply chains that control hundreds or thousands of companies over several tiers
present significant risks (Smith & Zsidisin 2002). Another issue that may arise is that pushing
Supply chain and JIT 2
up risks the supply chain when implementing JIT limits ownership and increases the risks of
obsolescence, inventories, and lack of responsiveness to peak and troughs in customer
demands, thus, becoming even more complicated (Smith & Zsidisin 2002, p.119). Ownership
problem can also be brought in by the process, which is triggered by outsourcing and
concentration on core competencies, the accelerated use of manufacturing and distribution,
and logistics partners leading to a complex network of business correlations with confused
dimensions of responsibilities (Smith & Zsidisin 2002, p.119). These risks will emerge into
inventory costs due to product obsolescence and markdowns or stock-outs, which are pushed
up the supply chain.
When implementing JIT, getting the source of risks for the supply chains becomes
hard. This is because the risks have been pushed up the supply chain in disorderly and
concealing manner. Chaos effects can arise in supply chains (Smith & Zsidisin 2002). This is
as result of second-guessing, unnecessary intervention, overreactions, and distorted
information throughout a supply chain. Another issue that emerges is inertia. There will be
general lack of responsiveness to dynamic and market signals of environment conditions.
Inertia will also be brought by inflexibility of cost production. The practice of pushing risks
up the supply chain also brings problems with cost containment, whereby, ability to adapt to
changing costs becomes difficult. In addition, visibility is limited by the pushing-up of the
risks as supply chain executives still struggles to analyze and act on the right information
Reference list
Smith, M. & Zsidisin, G. (2002). Early Supplier Involvement at MRD, Practix, Best
Practices in Purchasing & Supply Chain Management journal. pp. 119-122.
