I highly recommend playing the beer game with different inventory sizes, and looking at the results.
Inventory management is not a simple task, and can not be generalized like this. JIT was adopted because it reduced the number of supply chain disasters, not despite increasing it like you claim. But, of course, that reduction wasn't homogeneous and not every single place saw a gain.
I apologize for the unclarity. I was not trying to assert that JIT is fundamentally wrong and always leads to disaster.
My point was that any optimization process can go wrong when people start focusing on maximizing the optimization rather than the ultimate goal. That is how JIT goes wrong. It is also how overfitting appears in neural net training, how security flaws appear in branch prediction, etc.
I'm an MBA. I love JIT. But it's undeniable that JIT has led to disasters. I'm not blaming the approach, I'm blaming specific implementations.
Inventory management is not a simple task, and can not be generalized like this. JIT was adopted because it reduced the number of supply chain disasters, not despite increasing it like you claim. But, of course, that reduction wasn't homogeneous and not every single place saw a gain.