The queues outside branches of Northern Rock are a reminder how quickly panic and queues can spread. There is an important lesson here for the logistics and distribution industry. Our industry seeks to hold the minimum possible stock, as stock is expensive.
But this makes us extremely vulnerable. If there was not a run on a bank but a run on a supermarket, it could quickly become very serious. It could be caused by a fuel shortage (either through protesters, terrorism, or problems with terminals) or problems with food reaching the country.
Our distribution systems are complex and are national systems not suited to using local produce (although many think they should). If you think it could not happen, just think back to the fuel protests when trucks ran out of fuel and supermarkets started to run out of food.
Increasingly the industry is questioning just in time delivery. It does not really even work in the car industry, where the idea started. What we need now are robust supply chains and that means more stock, and more warehouses near the centres of population. That includes fuel as much as food and drink.
The money rapidly moved out of Northern Rock because of the panic, but at least the Government could calm the situation by giving guarantees. If there is a run on fuel or food, the Government will not be able to solve it with a statement. A run on a supermarket can only be halted by lots of stock. Our supply chains need to be less lean and more robust.
If you think it will not happen, just think that only a week ago huge queues outside banks with people demanding their money, would have been unthinkable.