With JIT, companies order only what they need when they need it. Recently, though, food manufacturers began stocking up on raw materials to maintain production and mitigate impact if supply systems fail or imports take market share.
This shift is a shocking adjustment for many food companies that have long used a JIT strategy. Although panic buying and food hoarding has decreased, companies are increasingly shifting to a just in case (JIC) inventory strategy, maintaining larger inventories to reduce risk of back orders in the face of uncertainty. Having up to three months’ supply on hand may be a smart decision, especially in food-insecure countries, according to Dan Basse, leading industry economist and president of AgResource.