Is it the End for Lean Supply Chains?

There are a few buzz words floating around the lean supply chain publications at present. Those are ‘risk’, ‘resilience’, ‘mitigation’, and ‘sustainability’.

What is a Lean supply chain?

Lean or ‘JIT’ (Just in time) both refer to the type of supply chain management philosophy which originated with Toyota post WW2. The idea behind this type of supply chain is to reduce production times and speed up response times from suppliers. In turn, this should reduce costs and improve overall revenue. Within a Lean operation, seven areas of a standard supply chain are considered waste. These are overproduction resulting in excess inventory, unprocessed inventory, excess human or machine motion, product defects, over-processing, production line waiting, and transport (of materials, workers, or products).

Many areas of our manufacturing operate lean supply chains. From supermarkets to airline retail to IT, car manufacturers, and more.

Advantages

  • Increased productivity
  • Reduced lead time and defect rate
  • Cheaper in the short term

Disadvantages

  • Protectionism
  • Natural disaster
  • Pandemics

What were the issues during Lockdown?

Effectively, the biggest issue for supermarkets turned out to be distribution. However, in our globalized world, other areas of manufacturing encountered disruptions in component production, delays in shipping, and lower output mainly due to social distancing causing smaller teams or factory closures. This resulted in a knock-on effect that carried over to smaller suppliers and delayed payments.

Is it the end for Lean?

While Covid-19 has certainly highlighted major weaknesses with the Lean/JIT model, it is not likely to be the end of the line for Lean/JIT.

The countries that are seeing a return to economic growth will determine whether or not lean survives. While lean has not been adopted across the board, those who did adapt and are now looking to return to more resilient models may have a problem competing with those who are able to operate a low cost, high revenue model.

But the focus will shift from efficiency. Coming back to those buzzwords, it seems realistic that companies will have to consider how to mitigate the risk of a 2nd wave to their supply chains. This will take them towards sustainability and resilience.

What will this mean for recruitment?

In instances where it is the lean model that has left companies exposed, finding problem solvers who can integrate resilience and sustainability into a lean operation could be the best way forward.

Many are already looking at this. In the last weeks, we have seen a rise in risk management and supply chain vacancies across the board. Whether it is Supply Chain Mapping (which can take up to 5 years according to Paul Simpson – Risk, Supply Chain editor of Supply Management), bringing some aspects of production closer to home or examining sustainability in the context of climate change, it certainly looks like we will see an increase in analytical and risk-focused roles. Furthermore, we might see a further increase in the trend towards the use of tech on production lines as employers look to combat disruption and skills shortages. This means that companies will be looking for candidates with skills in AI, automation, and digital.

Some will argue that Covid is an exceptional circumstance. They might also argue that we are not likely to see another pandemic for another 40 years. However, with the EU’s sustainable development strategy to consider, and, of course, Brexit around the next corner, there will be demand for skilled candidates for some years to come.

Useful links and resources:

 

https://itsupplychain.com/the-importance-of-lean-manufacturing-in-the-post-covid-19-world/

https://www.raconteur.net/manufacturing/supply-chain-talent-shortage

https://www.wired.co.uk/article/stockpiling-supermarkets-coronavirus

https://www.gtreview.com/news/sponsored-statement/from-just-in-time-to-just-in-case-covid-19-brings-supply-chain-resilience-to-the-fore/

https://www.ft.com/content/606d1460-83c6-11ea-b555-37a289098206

https://www.cips.org/who-we-are/what-we-do/