Just-in-time freight plans survive 11 September crisis

28 February 2002
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28 February 2002 | Robin Parker

The terrorist attacks of 11 September have had surprisingly little impact on long-term freight and supply chain plans, according to the first major analysis of their effect.

Most European businesses suffered delays in ordering, processing and receiving their supplies, but will continue to risk using "just-in-time" systems rather than building up extra stocks, said the study by market analyst Datamonitor.

Less than a fifth of any of the six sectors surveyed had changed their just-in-time strategies - in which stocks are kept to a minimum and delivery schedules are accelerated - since September.

Disruption was largely confined to the month following the attacks, extending order processing and lead times by up to a week in air freight and three to four days in air mail parcel delivery.

The survey polled more than 600 companies in eight European countries, including the UK, in December.

Some logistics firms were steeply hit financially, including Exel, which said the attacks cost it around £5 million.

Many of the 55 per cent of firms reporting changes to short-term supply chain management were in the high-tech manufacturing sector, a fifth of which depend on air freight.

But manufacturers said switching to other forms of freight was unfeasible because of the time-critical nature of its supply demands.

Nearly a fifth of companies in the retail sector, seen as more flexible in its freight demands, have considered a move away from air transport.

John Mitchell, logistics analyst at Datamonitor, said most companies felt the impact was too short term to consider changes to their supply chain strategies.

"Lead times increased for only about a month, and 90 per cent had returned to normal efficiency by November," he said.

"Most companies realised the attacks just happened, they could not get around it, and then they moved on."

But Mitchell warned that the purchasing of materials, goods and logistics services would inevitably be affected in the long term.

"You need to have contingency plans to cope with the worst, and stronger, more flexible relationships must be formed with suppliers in order to attempt to meet the fluctuating demand."

SMfeb2002

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