Will Covid be the Death or Pinnacle of Lean?

by Tim Richardson | Iter Insights

Will Covid be the Death or Pinnacle of Lean?

Will Covid be the death or pinnacle of Lean? feature image

The challenges to the integrity of our supply chains over the past three months have been something we are unlikely to have experienced before. The ability to maintain supply has been an all-consuming with radical and rapid changes in demand way beyond anything historically recognisable.

As a lifelong user of Lean, I have been asking myself if Lean has been found out, helped or got in the way of delivering a robust service. More than once I have heard “thank goodness we have had more stock than we should have”, which, being a sensitive type I took as a challenge to the ability of Lean to deliver in these strangest of times.

The case for the prosecution rests where the single overriding Lean focus is on ever lower inventory and the ideological belief that inventory is wrong. I suspect that none of us designed our supply chains to fully reflect the scale of what has happened, but if we condemn Lean on the basis that we had too little inventory to meet the seismic changes that have occurred, we have our focus wrong. What we have done is failed to have adequately factored the full risk into our calculations.

A client of our always describes inventory as an “entitlement” – in other words enough to lubricate the supply chain to function effectively, but no more than that. Where demand is predictable and volatility and variety low then this can be very low – but where there is a high, relatively volatile demand we need we to have strategic inventory buffers to deliver our service commitment and the required operational efficiency. After all, you do not run your car on empty if you are heading into the wilderness and unsure where the next fuel will come from!

The case for the defence, is where Lean has been adopted philosophically and culturally. Whilst we might have got caught out with too low inventory levels in the short-term, we are much better equipped to address the issues. Examples range from having the control and to rapidly switch or move capacity without loss of productivity to switching sources of supply and rapidly assimilating these into statistically capable processes.

Above all, empowered teams will make best use of the skills of those that know best i.e. those making the product.

 

The question at the start of this article was would Covid deal a fatal blow for Lean. My belief is that for some it will be, with lean blamed for a failure to supply wherever lower inventories have been pursued to the point of anorexia. Whilst all supply chains will be fatter to deliver greater resilience those companies is part of the cultural DNA, will be praising how lean has helped focus on understanding, adjusting and aligning to a new reality.

If you want to understand how a Lean driven culture can help you to emerge from Covid-19 as a strong winner, with a strengthened organisation then we would love to hear from you. Mind you, if you believe Lean has failed you, we would love to understand why and help you with practical strategies and approaches that will change your ways of doing business.

 

Tim Richardson
Development Director

Iter Consulting