Friday, 30 October 2015
Trucking...................from Rico
This is NOT good.
- Trucking is one of those indicators (like the Baltic Dry Index) of economic activity. When you see this kind of data, you KNOW the clowns at the FED are either sniffing glue, or lying like a rug when they gas about the economy. Pick one.
I remember when the J.I.T. (just in time) craze swept industry. Trucks would deliver goods just in time to replace the goods consumed, so no more back rooms full of stock for re-stocking shelves because it wasn't 'needed' and it wasn't 'wanted' (the plastic pocket protector crowd said it cost money to have goods sitting in the back room).
- So money was saved. A lot of money. Smart. Modern. Efficient. Profits!
This all works just fine if nothing goes wobbly. You need fuel for the trucks. You need trucks. You need the supply chain to function perfectly. Everything has to work.
- Otherwise, when the trucks stop, everything stops.
Too few today understand that stores have about three days worth of goods on the shelves and nothing in the back room. Think about grocery stores, Hurricanes Sandy or Katrina for a moment. When the shelves are empty, that's it. Finito Benito. Nothing else will be there for a while.
- Just In Time then becomes "out of time" in the wink of an eye.
From Theo Spark at 11:37
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1 comment:
JIT and the Trucking rate are only related when a store reduces their in-store inventory and switches to JIT. For a small period of time, trucking is reduced until the inventory is eliminated, then resumes at the rate of sales.
Sales is the driver of the Trucking rate. Lower sales = less deliveries.
I agree that JIT has made the supply chain more sensitive to interruptions, but has reduced store overheads by increasing the floor area for sales.
It would be more interesting to see how the volume of direct-to-home deliveries (like UPS, FedEx) have changed over time...
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