Keeping Lean Supply Chains Relevant in a Post-pandemic World
A lean supply chain, at its heart, focusses on inventory optimisation and operational excellence. It aims to eliminate waste at every stage of the production and distribution process, and so have courted additional terms such as “continuous flow” and “just-in-time”. The critical aim is optimisation of inventory management rather than minimisation, and with its focus on consistency and repeatability, lean supply chains are designed to be arguably less flexible. For this reason, some have come to view this type of network as irrelevant in a disrupted world – agility rules. However, this is not the case.
Cushman & Wakefield’s latest report, Keeping Lean Supply Chains Relevant in a Post-pandemic World, is the second installation in a supply chain series, exploring key trends in the supply chain industry, highlighting the importance of optimising supply chain networks, with a key focus on lean supply chain how it will continue to be relevant.
Disruption in Lean Supply Chains
Three key trends affecting lean supply chains:
Prior to the COVID-19 pandemic, several economic forecasts and commentators were identifying indicators that the world had reached peak globalisation and that it was starting to retreat from that peak. A key component of this is the rise of domestic consumption – a greater proportion of products are consumed domestically and while this is most evident in mainland China, we expect the next wave of domestic consumption growth to occur in India and parts of South East Asia. However, this is not to say interregional trade is not growing rather that is evolving.
The fundamental tenet of lean supply chains is that they are optimised for the repeatable and reliable flow of goods. This is being challenged as consumers demand more product customisation; evolving consumer requirements cannot be ignored. The question therefore evolves into how customisation can be incorporated into a lean supply chain rather than abandoning a lean approach.
Automation within supply chains is both a disrupter and a solution to network optimisation. Automation presents opportunities to overcome challenges and introduce greater efficiency. Perhaps one of the most visible adoptions of automation has been to overcome labour shortages. As countries simultaneously encounter population ageing and a shift up the value chain, labour shortages at times have become acute and costs have become considerably higher.
To find out more about understanding and reviewing your supply chain networks, please connect with our team of experts via our Asia Pacific Logistics & Industrial hubExternal Link or our Global Logistics & Industrial page.