JUST IN TIME

I have just now returned from a long walk through the nearby parkland.  A section of the park traverses the course of an ancient creek, long diverted underground.  Winding through is a gravel path, with edges neatly formed by wooden battens.  Ordinarily, the path-side grasses grow to the path’s edge, but in these Covid-19 times the grass has been trodden down…….by walkers moving off the path to keep their arm’s-length distance.  And good for them!  If only the world’s problems now and going forward could be so easily resolved.

Only a couple of times have I involved this Blog in a bit of preaching, but if ever it was message time this is it.  I have no solutions, certainly none that have occurred solely to me, but I’m happy to share some thoughts I’ve drawn from The Saturday Paper of 2 May, extracted from an article titled “The Real Reason our Shelves Were Empty” [and sub-headed “Food for Thought”], by journalist and author, Margaret Simons.  

The thoughtful food that Simons serves her Saturday readers is underpinned by the manufacturing concept known as just-in-time.

Just-in-time manufacturing or production is the methodology (pioneered by Toyota in the 1960s) aimed at reducing times within the production system.  Indeed, it extends through the whole supply chain – from all suppliers to all consumers.  When a just-in-time strategy is applied to inventory it aims to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, or at the point of sale.

Hence, the manufacturer holds just sufficient raw materials to effect the current production run, and relies on its suppliers to deliver replacement materials “just in time” to maintain that production run.  Hence, the metal fabricator holds just sufficient plate steel to cover next week’s budgeted output.  Hence, the food retailer holds just sufficient goods to keep its shelves stocked, with minimal stock behind the counter; and in order to re-stock the shelves relies on its suppliers to deliver “just in time”– somewhat harder to achieve with fresh food, but made all the more relevant because of the spoilage factor.

The central premise that the system rolls efficiently along, and can withstand minor hiccups, becomes a glaring fault when a part of the chain breaks down.  Moreover, the just-in-time system is vulnerable to panic buying and surges in demand.

Taking household consumables as a graphic example: In Australia, Simons reports, “supermarket warehouses and storages only hold about 30 days of stock of non-perishable items, and only about five days of fresh produce.”  Couple this with the fact that, according to Woolworths research, the average Australian household, prior to the Covid-19 panic buying, had just a few days’ worth of food in the pantry, but that that household now has a two weeks supply, there was clearly a surge in buying that not only depleted supermarket shelves but emptied the warehouses as well.  The specific problem of the empty shelves was not that householders started to stockpile (up from a few days to a couple of weeks), but that they all did it at once.  

Clearly the system, from the vantage point of a few weeks later, was able to cope with the buying surge. Notwithstanding inherent just-in-time vulnerability, Australian supply chains were able to function pretty normally. But the question is: “What about next time?”  Should we, as a nation, be putting more thought and effort into planning ways to cope with and to defeat the next crisis?  

The issue of national self-sufficiency has re-emerged.  It used to be a mantra.  Australia needed a strong manufacturing base, it needed a car-making capability, it needed to reduce reliance on the rest of the world.  All that has long passed, with the massive opening up and growth of the world economy.  Australia unashamedly indulges its thirst for the products of all nations, significantly financed by mineral exports.  This is not inherently evil or foolish, but query whether more thinking should be put into making the nation shockproof.  The degree of thought, I suggest, should be commensurate with the degree of peril.

Consider these Margaret Simons observations:

·              The flow of data from supermarket checkout to warehouse to supplier is a modern wonder, although so dependent on technology that the system could be brought undone by hackers or a cyber attack.

·              Likewise, consumer demand directly triggers production schedules which in turn trigger orders for raw materials.  Systemic vulnerability.

·              The firms that dominate the Australian grocery field (Coles, Woolworths, IGA and Foodworks) are steadily consolidating their distribution centres – Coles, for example, from 33 nationwide to 14 in recent times, and Woolworths from 31 to 11.  Surely the increase in scale, and the centralising of locations, makes these businesses - and the nation! - more vulnerable.  Cut the transport links, or suffer flood or fire, or compromise the power supply, and it might take weeks to restore the flow of goods.

·              Plastic milk bottles are typically moulded on site, but the plastic pellets are imported.  No pellets = no bottles = no domestic milk.

·              Although bread is mostly made from local wheat, almost all the yeast is imported.

·              The packaging for UHT milk comes from China.

·              Mustard is made in Australia, but not without the mustard seed that comes from the USA.

·              We have Australian-made bacon, but not without it being cured in imported brine.

·              Fertilizer, widely used in Australian agriculture, mainly comes from China.

·              Indeed, not only fertilizer but also 90% of agricultural pesticides and herbicides are imported from India or China.

·              Australian grown tomatoes…..okay for bottling?  However, the jars come from China or India or Italy, and the lids likely come from overseas too.

·              And should the tomatoes be destined to become pasta sauce, the spices will be sourced abroad.

·              And forget chocolate.

And so it goes.  The Covid-19 pandemic must inevitably lead to a massive rethinking of our national priorities, and one of the areas for examination I suggest is a revival of the idea of national self-sufficiency.    During the Second World War [from 1942] the re-orientation of national priorities led to rationing of the sale of tea and butter and meat and sugar and clothing (the last rationing was abolished in 1950).  Would it be feasible somehow in a time of peace to curtail consumption?  Voluntarily – fat chance!  By government regulation - what about liberties and freedoms?  

There is emerging some serious debate about our and mankind’s freedom to destroy the planet, so why not a debate about unfettered consumption? Self-interest, I suppose.  Sadly, the current lockdown, while almost universally applauded and accepted, has seen a backlash of selfishness: my right to hold a social gathering regardless, my right to play golf and to abuse the regulators, my right to ignore the common good.  And god help the Americans with their unhinged president encouraging unhinged behaviour.  However, despite these exceptions to principled behaviour, and maybe because of them, we need to use the moment to focus on a reformed future.

Without diminishing the remarkable steps that our governments have taken in this crisis, I fear that Prime Minister Morrison is itching to return to “normal”; and that is just not smart. The much maligned, but frequently quoted, Blind Freddy can see that the world has changed, and changed incontrovertibly.  There will be no return to the old normal.  The moment is here to be seized.

The steps we take now may be just in time.

Gary Andrews

[Still alive.  Still kicking.]