u/FreakingtfouT1

I’ve been thinking about this for a while and wanted to get some input from people deeper in supply chain / ops.

Over the past ~5 years—especially post-COVID—Just-in-Time (JIT) systems seem more dominant than ever. A huge percentage of firms now run lean, with minimal buffer inventory (60-70% of firms use JIT) At the same time, pricing behavior often follows a “rocket and feather” pattern: prices spike quickly when costs rise, but fall slowly when conditions normalize. The soft falls rarely give opportunity for price to stabilize to previous ranges.

Does widespread JIT adoption inherently increase inflation risk during global disruptions?

This is a question I asked in my int. Business class and I’m curious on your takes.

JIT inventory has grown massively alongside technological advancements, with major growth in just the past 5 years post covid. Considering two facts: that 60-70% of businesses practice JIT inventory systems, and that prices follow a "rocket and feather" dynamic (meaning they spike but trickle back down). Doesn't this introduce an inherent and exacerbated inflation risk within global supply chains in times of world disaster? This is a question I've been thinking about for about a year, and I would love to research it much more. I imagine there are nuances that might offset this inflation, like the scale and efficiency of global JIT adoption, streamlining product pricing, so pricing is more realistic, for example you rarely see deals like you used to, and that's because companies don't have as much random excess inventory, so their pricing is more "real." Continuing with this idea, because prices are more reflective of real value, the inflation is relatively muted during stable periods but drastic during times of disruption.