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GLASNER",[],"Checking warehouse database of inventory with laptop, view from above","Image","2.0.0",[],"embedded-entry-inline",{"data":192,"marks":193,"value":54,"nodeType":55},{},[],"paragraph",{"data":196,"content":197,"nodeType":194},{},[198],{"data":199,"marks":200,"value":201,"nodeType":55},{},[],"The lesson many manufacturing executives are taking from the Hormuz crisis is the wrong one. ",{"data":203,"content":204,"nodeType":194},{},[205],{"data":206,"marks":207,"value":208,"nodeType":55},{},[],"Not entirely wrong. If you are left scrambling for raw materials , the instinct to carry a bigger buffer makes sense. ",{"data":210,"content":211,"nodeType":194},{},[212],{"data":213,"marks":214,"value":215,"nodeType":55},{},[],"But inventory isn’t the root problem. Decision latency is. ",{"data":217,"content":218,"nodeType":194},{},[219],{"data":220,"marks":221,"value":222,"nodeType":55},{},[],"The debate dominating procurement teams today(lean versus buffered, just-in-time versus just-in-case) focuses on the wrong variable. The question isn't how much you hold. It's how quickly you can see disruption developing and what you decide to do next. ",{"data":224,"content":225,"nodeType":230},{},[226],{"data":227,"marks":228,"value":229,"nodeType":55},{},[],"What the JIT debate is actually about ","heading-2",{"data":232,"content":233,"nodeType":194},{},[234],{"data":235,"marks":236,"value":237,"nodeType":55},{},[],"Just-in-time manufacturing was built on a simple premise: eliminate waste. Less inventory, lower carrying costs, less capital tied up in stock sitting in a warehouse. For the past three decades, this worked well. Because the supply chains it depended on were broadly predictable. ",{"data":239,"content":240,"nodeType":194},{},[241],{"data":242,"marks":243,"value":244,"nodeType":55},{},[],"Then conditions changed. Fragility accumulated through events like the 2011 Thailand floods, the 2021 semiconductor shortage, the Red Sea disruptions of 2024 and 2025. And finally, the ongoing Strait of Hormuz instability and its pattern of opening and closing  ",{"data":246,"content":247,"nodeType":194},{},[248],{"data":249,"marks":250,"value":251,"nodeType":55},{},[],"Lean inventory remains logically sound. Lean inventory without operational visibility is not. It’s an unpriced bet on a supply chain that no longer behaves predictably. The bet used to pay off most of the time. Now it pays off less frequently and fails more expensively. ",{"data":253,"content":254,"nodeType":230},{},[255],{"data":256,"marks":257,"value":258,"nodeType":55},{},[],"The buffer calculation ",{"data":260,"content":261,"nodeType":194},{},[262],{"data":263,"marks":264,"value":265,"nodeType":55},{},[],"Buffer stock is usually treated as a cost question. How much working capital should be tied up as insurance against disruption? ",{"data":267,"content":268,"nodeType":194},{},[269],{"data":270,"marks":271,"value":272,"nodeType":55},{},[],"What gets left out is the cost of slow detection. If a plant typically finds out about supply disruption two to three weeks after it develops, the buffer required to absorb that lag is substantial. If it has visibility into supplier shipment patterns, port congestion data, or the leading indicators that precede shortages, it can find out in near real-time. Andthe buffer required is considerably smaller. ",{"data":274,"content":275,"nodeType":194},{},[276],{"data":277,"marks":278,"value":279,"nodeType":55},{},[],"Visibility and buffer are substitutes for each other. The earlier you detect risk, the less inventory you need to protect against it.  An organization that sees disruption four weeks before competitors can often run leaner. And still outperform them. ",{"data":281,"content":282,"nodeType":230},{},[283],{"data":284,"marks":285,"value":286,"nodeType":55},{},[],"The critical June signal ",{"data":288,"content":289,"nodeType":194},{},[290,294,305],{"data":291,"marks":292,"value":293,"nodeType":55},{},[],"At first, the numbers look encouraging. The ",{"data":295,"content":297,"nodeType":304},{"uri":296},"https:\u002F\u002Fwww.pmi.spglobal.com\u002FPublic\u002FHome\u002FPressRelease\u002Fd52074988b4f4367a787ba833e23b5c6",[298],{"data":299,"marks":300,"value":303,"nodeType":55},{},[301],{"type":302},"underline","S&P Global Manufacturing PMI","hyperlink",{"data":306,"marks":307,"value":308,"nodeType":55},{},[]," hit 55.7 in June, its highest reading in nearly four years. New orders rose at the sharpest rate in that time. ",{"data":310,"content":311,"nodeType":194},{},[312],{"data":313,"marks":314,"value":315,"nodeType":55},{},[],"The mechanism tells a different story. Manufacturers are stockpiling defensively, not responding to underlying demand. S&P Global's chief business economist was direct: purchasing activity grew at rates last seen during the 2020 supply scramble. Input inventories are being built at rates approaching an all-time high for the survey. Manufacturers are racing to insulate themselves from the Middle East supply disruptions and cost spikes. ",{"data":317,"content":318,"nodeType":194},{},[319,323,332],{"data":320,"marks":321,"value":322,"nodeType":55},{},[],"At the same time, manufacturers are cutting jobs at the fastest pace since 2009 seen outside the pandemic. Manufacturers have cut jobs in three of the past four months. Citing concerns about whether demand will hold once the stockpiling impulse fades and worries about escalating costs for raw materials, steel and aluminum. The ",{"data":324,"content":326,"nodeType":304},{"uri":325},"https:\u002F\u002Fwww.ismworld.org\u002Fsupply-management-news-and-reports\u002Freports\u002Fism-pmi-reports\u002Fpmi\u002Fapril\u002F",[327],{"data":328,"marks":329,"value":331,"nodeType":55},{},[330],{"type":302},"ISM Prices Index",{"data":333,"marks":334,"value":335,"nodeType":55},{},[]," sits near its highest level since 2022. ",{"data":337,"content":338,"nodeType":194},{},[339],{"data":340,"marks":341,"value":342,"nodeType":55},{},[],"That combination is instructive. A four-year high in activity driven by defensive purchasing alongside the deepest job cuts in 15 years tells you the current expansion is borrowing from the future. When the stockpiling impulse fades, the demand fades with it. And the workforce has already been cut. ",{"data":344,"content":345,"nodeType":230},{},[346],{"data":347,"marks":348,"value":349,"nodeType":55},{},[],"How visibility changes the calculation ",{"data":351,"content":352,"nodeType":194},{},[353],{"data":354,"marks":355,"value":356,"nodeType":55},{},[],"The Hormuz disruption illustrates this clearly.Particularly for plants that haven't yet felt it. The standard four-to-eight week lag between upstream supply disruption and downstream production impact means manufacturers today haven't registered the full effect. It's moving through tier-two and tier-three supplier networks. Even while their inventory positions look fine on a spreadsheet. ",{"data":358,"content":359,"nodeType":194},{},[360],{"data":361,"marks":362,"value":363,"nodeType":55},{},[],"That’s where visibility changes the equation. Plants with deep supply chain visibility have a structural advantage. When planners can see unusual order patterns developing upstream, procurement can get ahead of the market. When alternative sources can be qualified while they still exist, stockpile decisions get made before the scramble. Not during it. ",{"data":365,"content":366,"nodeType":194},{},[367],{"data":368,"marks":369,"value":370,"nodeType":55},{},[],"Without that visibility, the sequence is familiar. A supplier reports a delay. Procurement starts searching for alternatives. Competitors do the same. Capacity tightens. Spot prices rise. Spot prices spike. Lead times extend from weeks to months. Production schedules slip. ",{"data":372,"content":373,"nodeType":194},{},[374],{"data":375,"marks":376,"value":377,"nodeType":55},{},[],"Same disruption. Wildly different outcomes. The difference is supply chain intelligence. Specifically, the data infrastructure to see what's developing before it reaches your dock. ",{"data":379,"content":380,"nodeType":194},{},[381],{"data":382,"marks":383,"value":384,"nodeType":55},{},[],"-----------------------------------------------------------------------------------------------------------------------------",{"data":386,"content":387,"nodeType":194},{},[388,392,401],{"data":389,"marks":390,"value":391,"nodeType":55},{},[],"Discover the full strategy in Octave’s eBook, ",{"data":393,"content":395,"nodeType":304},{"uri":394},"https:\u002F\u002Fwww.octave.com\u002Flearn\u002Fresources\u002Febooks\u002Fhow-streamlined-supplier-quality-management-can-help-with-supply-chain-challenges",[396],{"data":397,"marks":398,"value":400,"nodeType":55},{},[399],{"type":302},"How streamlined supplier quality management can help with supply chain challenges.",{"data":402,"marks":403,"value":404,"nodeType":55},{},[]," ",{"data":406,"content":407,"nodeType":194},{},[408],{"data":409,"marks":410,"value":384,"nodeType":55},{},[],{"data":412,"content":413,"nodeType":230},{},[414],{"data":415,"marks":416,"value":417,"nodeType":55},{},[],"The decision speed question ",{"data":419,"content":420,"nodeType":194},{},[421],{"data":422,"marks":423,"value":424,"nodeType":55},{},[],"Here's where it matters for how you think about investment. A procurement team that's concluded the answer is \"more inventory\" will recommend buying more stock. A supply chain team that's concluded the answer is \"better visibility\" will recommend investing in data infrastructure. ",{"data":426,"content":427,"nodeType":194},{},[428],{"data":429,"marks":430,"value":431,"nodeType":55},{},[],"Both address the same underlying problem. Only one addresses the root cause. ",{"data":433,"content":434,"nodeType":194},{},[435],{"data":436,"marks":437,"value":438,"nodeType":55},{},[],"More inventory is a static response to a dynamic challenge. It helps protect against the last disruption, while the next one will likely look different. Better visibility improves your ability to respond regardless of the trigger. Whether it's a chokepoint. A semiconductor shortage. A pandemic. A factory fire in a single-source supplier. Or a currency crisis in a key sourcing region. ",{"data":440,"content":441,"nodeType":194},{},[442],{"data":443,"marks":444,"value":445,"nodeType":55},{},[],"The specific event keeps changing. Early warning, decision speed and the ability to act before options run out don't. ",{"data":447,"content":448,"nodeType":230},{},[449],{"data":450,"marks":451,"value":452,"nodeType":55},{},[],"What this looks like in practice ",{"data":454,"content":455,"nodeType":194},{},[456],{"data":457,"marks":458,"value":459,"nodeType":55},{},[],"Some buffer stock is prudent. How much depends on your product, your supplier geography and your risk tolerance. The point is that your buffer should be sized with full information about how fast you can actually detect and respond to disruption. Not against a general sense that you need more cushion. ",{"data":461,"content":462,"nodeType":194},{},[463],{"data":464,"marks":465,"value":466,"nodeType":55},{},[],"For operations leaders running that assessment right now, the most useful question probably isn't \"how many weeks of stock should we hold?\" ",{"data":468,"content":469,"nodeType":194},{},[470],{"data":471,"marks":472,"value":473,"nodeType":55},{},[],"It's \"how many days does it typically take us to go from a developing upstream disruption to a decision we can act on?\" ",{"data":475,"content":476,"nodeType":194},{},[477],{"data":478,"marks":479,"value":480,"nodeType":55},{},[],"That number determines how much buffer is actually necessary. And for most plants, if they're honest about it, that number is longer than they'd like. ",{"data":482,"content":483,"nodeType":194},{},[484],{"data":485,"marks":486,"value":487,"nodeType":55},{},[],"The organizations reducing their exposure to supply disruption aren't the ones with the deepest pockets or the most conservative inventory policies. They're the ones that are systematically shortening the gap between something going wrong and the people with authority to respond knowing about it. ",{"data":489,"content":490,"nodeType":194},{},[491,497],{"data":492,"marks":493,"value":496,"nodeType":55},{},[494],{"type":495},"bold","Visibility and control are the real variables. 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