The ‘just-in-case’ inventory rebound: Post-pandemic trade-offs between resilience and working capital
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https://doi.org/10.71350/30624533117Keywords:
Supply chain resilience, working capital optimization, inventory management, strategic buffering, resilience fatigueAbstract
The COVID-19 pandemic delivered a seismic shock to global supply chains, exposing profound vulnerabilities in highly efficient Just-in-Time (JIT) inventory systems as critical stockouts paralyzed industries worldwide. This crisis triggered an urgent pivot toward resilient Just-in-Case (JIC) buffering strategies—but does this shift represent a lasting transformation or merely a temporary reaction? Through rigorous analysis of panel data spanning 1,200 firms across 10 industries from 2018–2023 and in-depth interviews with 30 supply chain executives, this study examines whether organizations sustain elevated safety stocks post-crisis and at what cost to working capital efficiency. Our findings reveal a complex reality: while 60% of firms increased inventory buffers by 15–40% during the pandemic's peak, only 20% maintained these levels beyond 2022. By 2023, aggregate stocks had reverted halfway to pre-pandemic baselines despite persistent geopolitical and climate risks, demonstrating our pioneering "Resilience Fatigue" thesis—the waning urgency of past disruptions against mounting working capital pressures. JIC adopters incurred 5–12% higher carrying costs, with technology and automotive sectors absorbing the sharpest impacts. Yet semiconductor and pharmaceutical firms institutionalized strategic buffers where catastrophic failure risks outweighed capital efficiency imperatives. By demonstrating how temporal decay reshapes the resilience-capital trade-off, we extend foundational supply chain theory and establish a contingency-based neo-resilience paradigm. This research delivers actionable frameworks for intelligent buffering and charts pathways for AI-driven hybrid models, empowering firms to balance operational robustness against financial vitality in our age of perpetual disruption.
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