One of the biggest risks to the JIT strategy is when there is instability in the environment. In the case of 9/11, for example, the paralysis of the plane caused a serious disruption of material transport locally and internationally. Additionally, the 2011 earthquake in Japan affected both the automotive and mobile phone industries. In such situations, stock-out costs can exceed carrying costs, which are the main basis for a leaner inventory system. The question then arises; Should companies continue to use JIT in the event of severe uncontrollable environmental events? According to Srinidhi and Tayi (2004), companies that are flexible enough and able to switch from a JIT system to a traditional inventory system will have a competitive advantage over other companies that do not switch. In such uncontrollable environments, the main advantage of JIT becomes a handicap with the increase in lead times and the management and coordination of additional data required in such times. This leads to a decrease in quick response times, which ultimately leads to increased costs for the company. During periods of economic crisis it may be possible for a company to change supplier from national to international or vice versa for some requested materials. However, this may not be desirable for all materials. Another problem that often occurs is the delay in shipping by transport companies. This may require some parts to be split into smaller batches and shipped separately, which would increase delivery times and shipping costs. A perceptive company with an “agile” system can quickly identify an alteration in the environment and gather useful information to respond quickly and avoid a serious internal impact. This agility in r...... middle of paper...... 2005 is not that rare. Other political issues create a great deal of uncertainty in supply chains around the world. Therefore, companies need to be aware of this and reduce risk by maintaining relationships with alternative suppliers. Another effective way to reduce risk is for businesses to purchase business interruption insurance. This type of insurance was generally easy to obtain. Today, insurance companies need much more information before providing service to businesses. Not only do they require more information about a company's suppliers, insurers also require you to have a list of multiple suppliers who, if a disaster or isolated incident were to occur, would not all be affected. Companies must maintain their JIT processes, eliminate redundancies and at the same time maintain a minimum number of suppliers to minimize risks.