> That's not a bad approach, but the problem is a lot of supply chain planning is top-down and dictates "we only want to keep $x tied up in inventory" and as you can imagine that number is driven by management as low as possible.

This actually isn't true to the extent you seem to think it is, though.

> Basically my view is that it's this over reactiveness and obsession with free cash flow has swung so far so as to create a too-painful jam.

But that's not the only cause of the supply chain situation. Transportation is also a big part of the issue. Even if you had 10 years' worth of widgets in a warehouse in China, if you can't get them on a ship, or the shipping costs are too high, you get supply shortages where the customers need those widgets.