Be Lean or Agile?

6/18/2014 Carsten Howitz Distribution

When working with manufacturing companies I have noticed that they all crave tools and techniques with these capabilities:

  • Ability to track and manage all supply chain activities in real time.
  • Being able to analyze the potential impact of unplanned events
  • Collaborate with customers and suppliers, planning and executing processes

Managing the supply chain is more than inventory control. You need to have what is called “end-to-end” visibility of the entire supply chain. When you run into issues, you also want to be made aware of the situation so you can take the necessary actions right away. The solution is to get these features from a software package.

Most manufacturers also tell me that we need to help them being lean. Lean means that raw material arrive just when it is needed (Just in time or JIT). I always tell them that being lean is great if you are in a steady-state environment. The problem is that most supply chains are not steady. Demand changes. Deliveries are delayed. Politics, business cycles and various acts of God can wreak havoc on carefully laid supply chain plans.

So being lean can cause issues. If you are too lean and demand increases you can’t fill your orders. If demand decreases and you have too much inventory, you risk your inventory gets obsolete.

The solution is to go beyond lean and become agile. Create the ability to see, and react to, potential problems ahead of time. Companies need software to help them with this. It is not only something that is nice to have; it is something that you need!

Read more here Supply Chain Management for Manufacturing Companies.

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