Over the past eighteen months the Pandemic has created challenges for the global economy that are having an ongoing significant impact on the manufacturing sector.  Shortages of crucial components for the technology and automobile sectors have been well-publicized and are the latest repercussions of a system that relies on Just-in-Time (JIT) manufacturing.

Just-in-Time manufacturing is an inventory strategy where materials are only ordered and received on the date they are needed for production.  This reduces costs on inventory and warehousing expenses.  To work effectively, a company must be able to accurately forecast the demand for its goods at future dates.  In addition, this type of manufacturing philosophy assumes no significant disruptions, as was experienced this past year.

The combination of a global pandemic, business failures, a tight labor market, low interest rates, and “helicopter money” from governments have led to a perfect storm that is stressing the JIT Manufacturing model.  When building a product that is intended to be supported generationally, JIT is not a realistic strategy as the manufacturer must have inventoried parts.

Let’s look at an example of how JIT can negatively affect the consumer:

During the mass COVID shutdowns, many suppliers halted the manufacturing of important components.  Because of these shutdowns, the manufacturers forecasted lower demand and therefore did not have the inventory in the event of a spike in demand.  With the economy improving, demand has spiked causing a critical supply issue, which not only inflated prices, but also created supply issues for the consumers and manufacturers who relied on inventory from these third-party manufacturers.

While parts shortages are unavoidable, being a vertically integrated manufacturer has provided Allen Organ with a unique position.  Also, Allen Organ Company has not and does not utilize JIT for inventory management because of concern for the type of disruptions the economy is now enduring.  Allen maintains a large inventory of core components for their instruments.  This includes support components for organs already infield. 

When making a large purchase, such as a musical instrument, the consumer needs to educate themselves on the manufacturer’s philosophy including the long-term sustainability of the company’s parts inventory.  An organ is an investment meant to last a life-time.  Make sure that you are doing business with a company that has invested in supporting customers in the future.