Just In Time inventory showing its weakness

I stopped by Walmart in my local area on a whim to check for ammo and I wasn’t surprised to find nothing more than shotgun shells and odd-calibre stuff.  An employee stopped my to ask if I needed help and we began talking about the ammo and shortages everyone seems to be experiencing.  The employee went further and told me about how they hadn’t even had a truck arrive the day before and how is caused all kinds of problems for the store and then pointed to the shelves and explained that while there was still much on the shelves, many of the common items had been spread around to take up empty space, while others were just plain out.

I thanked the employee for his time and took a stroll around the store to see this for myself, the guy was right, the shelves were spare or compeltely bare of some items.  Things that I noticed as being the most affected was ammo (of course), snacks items, beverages, food staples, frozen items, household (soap, laundry detergent, etc), stationary, and writing supplies.  I didn’t check the hygeine and personal care isles, nor did walk through the medication section.  A lot of this all fits into the catagory of common every day items we use.

What does all this mean?  regarding ammo, demand has been up for sometime and I wasn’t surprised to find little available.  As to the rest I’ll go out on a limb and assume for the sake of my argument that demand has remained steady.  So what’s the deal?  Well, it all comes down to supply and how that supply gets to stores to be sold.  If you remember Greg’s article about the Baltic Dry index, you’ll remember that shipping rates have essentially dropped to zero which caused large numbers of ships to be parked, This is because trade is down–no one is shipping anything.

All that brings me to my last point, Just-In-Time or JIT shipping.  The link can explain JIT better than I, but essentially it’s an inventory business model that brings goods to a store just as it’s needed, hence the terms Just-In-Time.  This system is all and good until you disrupt any part of the system.  A disruption in supply, demand, transport, anything will result is a rippling effect that can have far reaching results depending on the specific disruption.

Why do I prep?  The supplies that I need can very easily, in the space of hours, become unavailble.  It may be a minor inconveinence until supply is disrupted or transport is disrupted for anylength of time.  Demand skyrockets, prices skyrockets, people become desperate, desperate people do desperate things.

Right now we are seeing the ripples started months ago buy a drop of in trade (transport) because of a drop off in supply, and a decrease (world wide) demand.  Now things are becoming scarcer, it subtle now, but can easily and quicly become more pronounced.

Empty containers clog South Korean Port; Container ships sit idle; Idle container fleet grows.


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