[geeks] this is where the mac should be

[velociraptor]

On 10/18/06, Mike Meredith <very at zonky.org> wrote:
> There's good points and bad points to the jit-method of production.
> You've come across one, but a possibly more serious problem is that it
> leaves a company very vulnerable to supply chain problems ... possibly
> with very nasty consequences.
>
> Imagine Dell's supplier of a certain plastic widget goes out of business
> for some reason ... for the length of time it takes to find a new
> supplier, Dell won't be making or selling PCs, and their other suppliers
> won't be getting orders. If this happens at an economically bad time,
> Dell could find a cascade of suppliers going to the wall.

This is the exact problem that Cisco had leading up to and through the
bust.  Lead times on high end products in the 18+ months prior to the
dot com bust were such that customers were getting very antsy about
waiting and making lots of complaints.

Cisco increased on-hand inventory as quickly as it could to off set
this issue.  Then about 6-9 months before the bust hit full-force, the
execs started hearing the issues that system manufactures (Dell,
Compaq, HP) were starting to see with dropping sales.  By 3 months
before layoffs it was clear that the bad stuff was not going to be
dodged by even the likes of Cisco.

They started working on reducing the inventory backlog, but by then,
it was pretty much too late.

=Nadine=