As a side note the big company I worked for implemented JIT about 15 years before I retired and one of the things they did was build a huge parking lot that looked like a truck stops parking lot. We built locomotives and this parking lot had 100s of tractor trailer, trailers parked out there. They were full of parts that we didn’t own but our vendors stored on our property. We would place an order for one gizmo and they would email a confirmation and bill us and our fork truck guy would drive out and get one gizmo out and take it where it was needed.
I about blew a gasket at the stupidity of this system but the bean counters kept touting how JIT was saving us millions a year. Strangely the vendors all raised their prices and the cost of building a locomotive went up.
Another example of lunacy was I was put in charge of a cost reduction project with burn nesting using computers to figure out how to get better usage out of a sheet of steel on our burn tables. Starting out we threw away about 50% of the steel as scrap around the parts we made. By twisting and turning and flipping the parts we took out another 15% of the scrap. Then we looked ahead and saw other small parts we needed say in the next month that would fit in the scrap areas and we could save all this steel making stuff we knew we would need. We got the scrap down to between 10-15% and we are talking 100s of tons of steel. The bean counters then said why are we making these parts a month ahead of time? Answer because the material is free. They said stop doing it you are costing us a fortune in inventory costs, plus we get good money for that scrap and you are making that revenue stream diminish. Ya ten cents on the dollar. So guess what we went back to where we were to save inventory.
You now have me wondering about the tie in between trucking and transportation and industry.
When I started working the joke was the plant I worked at took in dirt at one end and finished locomotives went out the other with around 18,000 people being employed in the middle with high paying jobs.
That was somewhat true as on one end of the plant was a foundry that took in raw materials and a good deal of every part in the locomotive was processed from the most basic step we could. As an example we made our own wire etc.
Some place around the late 80s early 90s the slogan (Automate Immigrate or Evaporate) became the battle cry. And one by one outsourcing grew and in house diminished. One project I remember was we made locomotive fuel tanks almost fully automated in house. Plate steel came in from down state and was folded into a huge box and robots welded them up. Robots also painted them. They moved about 300 yards and we assembled. Word came out they were going to Mexico to take advantage of the 25 cent per hour labor. I said wait a minute we hardly have any labor in them. I looked into what the cost was to ship a fuel tank one per semi from Mex. To Pa. and it was way higher than what it cost in labor to make one. And get this the steel was being shipped down from the states. Well it happened and our labor here went up after because we had so many leaks to fix, but we were saving money.
We were buying castings from Poland weighing a ton or more sending to the states and having some machining done and then sending them back overseas to have other work done to them then back to the states to be made into something and then transported again to get to us. 20 years before the whole process took place in a plant 1 mile long.
I just wonder now with today’s world if it is time to recalculate some of this around the word thinking.