Fragility of the ‘Just in Time’ Supply System


Must people may not know about the ‘Just in Time’ (JIT) supply system that drives the US, namely the fragility of this system.

Growing up I remember getting fruit in my Christmas stocking, when I was young I could never figure this one out, later I learned the significance of this gift. It was a tradition that predated the JIT system that moves foods hundreds, and many times thousands, of miles from where it was produced to your local supermarket.

Prior to the JIT system oranges were not something that was available year round, let alone across the US from where they were mainly grown. The significance was the fact that it was an expensive treat back in the day to get fruits when you lived in an area where they would not grow.

Today with the JIT system we enjoy food and goods from all over the planet, the result of this is that local production and consumption has dropped to its lowest point in US history. The dependence on the JIT system to feed the population of the US is a disaster waiting to happen and the way that the system is put together it is extremely vulnerable to failure.

The main vulnerability is the interdependence of so many moving parts that when one breaks it affects almost the whole machine. An example that really shows this was when hurricane Katrina destroyed most of New Orleans. When this happened the stores that remained standing were quickly emptied of what little they had left and FEMA struggled for weeks trying to keep food and water deliveries flowing into the area.

This major failure is probably one of the reasons that FEMA came out and stated publicly that in the event of major disasters the reality is that they will not be able to provide help for days, weeks or even months depending on the magnitude of the disaster. During the aftermath of Katrina FEMA quickly found the limitations of the JIT system when it tried to reroute supplies quickly to the disaster area after its propositioned stockpiles were exhausted. That didn’t work out too well.

The JIT system relies on the fact that deliveries of food, fuel, fertilizer and other goods will happen on a daily basis and will arrive on time exactly when needed. There is no room for shocks to the system like Katrina provided, as a result it failed in that area.

Things like coordinated cyber-attacks against infrastructure and not just theories anymore, they are proven facts. Stuxnet was the first of these to be brought to light, a virus that specifically targeted Supervisory Control and Data Acquisition systems (SCADA), and just recently the Flame virus was discovered and brought to light. Both are very sophisticated viruses that were capable of inflicting severe damage to infrastructure if they were instructed to do so.

The JIT system is highly dependent on the computer networks that carry information to place orders, confirm deliveries and track the whereabouts of goods in transit. The transportation system that underlies JIT, if for some reason the fuel stops flowing, so does the transportation system that keeps JIT alive.

Based on the American Truckers Association Report here are some interesting facts about what would happen if this transportation network were to be disrupted:

Food

  • Food shortages would begin in a little as three days, especially perishable items.
  • Consumer panic would significantly amplify this problem due to panic buying which could lead to potential civil unrest.

Water

  • The supply of clean drinking water could disappear in as little as two to four weeks. When the chemicals to treat the water are used up that’s all she wrote for safe water.

Healthcare

  • Many hospitals have moved to JIT inventory systems, any stoppage in the deliveries would cause immediate shortages in basic supplies that are needed to care for patients.
  • Hospitals and elder care facilities would exhaust food supplies in as little as 24 hours.
  • Prescription drugs will be depleted quickly, most of the 55,000 pharmacies depend on daily shipments.

Transportation

  • Gas station fuel supplies would start to run out in 24-48 hours.
  • Air, rail and maritime transportation would be disrupted.
  • Without fuel for personal transportation many people cannot access grocery stores, banks, healthcare facilities and other daily needs.
  • Public transportation would cease.
  • Without fuel emergency services would be paralyzed further jeopardizing public safety.

Waste Removal

  • Within days of curbside pickup Americans would be awash in a sea of garbage.
  • Processing facilities for waste would grind to a halt without fuel to power equipment.
  • Uncollected waste would become a breeding ground for disease, insects and other vermin.
  • Urban areas would be hit the hardest and the fastest with problems starting in days.

Retail / Manufacturing / Economy

  • Replenishment of goods would be disrupted. Retail stores that maintain low inventory levels that rely on JIT practices would have inventories depleted in short order.
  • Consumers would add to these woes as panic buying ensues, this behavior is routinely noted during hurricanes and other disasters.
  • Manufacturers that rely on JIT to supply raw materials, parts and components will shut down their production lines.

Financial Sector

  • Consumers access cash 24/7 from 370,000 ATMs nationwide. JP Morgan Chase, the nation’s second largest consumer bank, replenishes its 6,600 ATMs via armored truck delivery every two to three days. Given the increase in ATM activity that occurs before and after any type of crisis, ATMs would run out of cash much sooner.
  • Small and Medium businesses would lose access to cash.
  • Regular banking functions would cease.

While it may sound really far-fetched, you really need to ask yourself if it’s really possible. Consider the following when thinking about this:

  • Organized cyber warfare is no longer just a theory, it’s a proven fact (Stuxnet, Flame and hacktivists like Anonymous). Attacks against the very communications network that supports the JIT system are possible.
  • The existing electrical distribution infrastructure in the US is facing ever increasing demand and has not seen any real upgrades in decades.
  • International economic issues than can affect the price and availability of fuel that powers the JIT distribution system.
  • China and Russia have stopped using the US Dollar as the standard currency for purchasing oil from OPEC member countries; this further undermines the US dollar.

The fragility of the JIT system is just one of the reasons that we all should be looking to local producers for the food we eat and products that we buy whenever possible. It is also another reason why doing some amount of food supply stocking up would be a good idea. With the resurgence of urban and rural gardening for food, this helps, but it is still not a solution to the far reaching problems that the JIT system has created in America.

Not that I want to beat up on the JIT system too badly, it has brought many things to many people that would not otherwise have access to them, but the darker side it that the system has also created a dependence that is not easily broken. History has already shown when the system is taken away at a local or regional level that the withdrawals associated with that dependence are severe.

Via: tpass


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