Need for Flexibility (supply chain in the pandemic)

For several decades, the 'just in time' concept of inventory was the mantra, ie
"...Don't order more goods than you need for the next fortnight, week or even day. Too much inventory on the shelves generated higher interest costs on loans, not to mention soaking up costly warehouse space, which adds to overheads..."
Angelo Markovsky, 2022

This concept was built on the expectations that supply chains involving ships, trains, trucks, warehouses, etc were reliable. When COVID-19 started, the supply chain was disrupted, ie
"...customers were forced to cancel shipments, receive incomplete orders and handle unpredictable delivery schedules..."
Angelo Markovsky, 2022

An extra cost was in freight as shipped containers were only being partially filled.

Thus organisations had to look at other ways to handle supply chain challenges.

A couple of possible solutions:

- using the 'direct-to-store' model by moving primary cross-dock operations back to the source country, ie near where products are manufactured and have a central warehouse where store-ready palletised orders are prepared and then dispatched directly to customers. Going upstream reduced the amount of re-handling in the receiving country.

- to manufacture closer to the markets.