How to create a fluctuation-proof supply chain...

Filed in archive Point of view on October 20, 2009

Manufacyrers' Monthly has featured a new article on the need for reshaping today's supply chains (Read the article here).

The author of the article argues that, for historical reasons, manufacturers have not built their supply chains to respond in a synchronised way to variability in customer demand. Production has been centred on making products to forecast and then pushing high levels of inventory into the supply chain to manage variability.

As companies seek additional cost-saving methods and step away from the perils of holding surplus inventory to manage unpredictable demand patterns, the principles behind the lean management philosophy are becoming more valued.

The article mentions a new report from ARC Advisory Group which has found out that 70% of the companies are using Lean philosophy as an improvement method for their processes.

However the question is, should the companies apply lean to all their processes or just just some of them? Is lean the right approach for all different types of business models?

As a food for thought, think about luxury apparel makers such as GUUCI and LOEWE: Does lean makes sense for such players? I am keen to know what are your thoughts.