Volcanoes Don’t Do Lean Manufacturing

Volcanoes Don’t Do Lean Manufacturing

Purchase to Pay, P2P and Dynamic DiscountingLean Manufacturing is not new. In the grand scheme of things, it has been about for no more than a blink of an eye. If it were not for Toyota developing the concept originally Lean Manufacturing would have been invented through another route. The fundamental foundation of Lean Manufacturing is information. Information about historic demand, about anticipated demand, inventory information, collaborative information, information that allows you to predict, with accuracy, your supply chain needs. And without global information networks, lean supply chains would simply not be possible in the 21st century world we have become accustomed to.

So what happens to a lean supply chain when a volcano erupts?

BMW was one of a number of manufacturer to find itself too lean to deal with Eyjafjallajoekull and with the return of the dust cloud to parts of Northern British Isles this week and expert predicting further disruption for the rest of 2010 perhaps it’s time to consider how to adapt supply chain strategies to recognise the risk of natural events.

This is a question that Carol MacIntosh asked last week  in The 21st Century Supply Chain blog – a question that she offered some answers to.

“I don’t think the answer is building more just in case inventory. In order to stay competitive supply chains have to be lean. (In fact, they are becoming even leaner with late stage postponement to satisfy increasing levels of customization on consumer goods.)” she writes.

Ask BMW if they agree.

The fact is that Lean works in a world that is predictable and as our ability to share and analyze data becomes more sophisticated, so we can become increasingly lean and deliver to customer demand such as customization in ever more sophisticated ways. But we don’t live in a predictable world.

Thankfully events such as Eyjafjallajoekull are rare, but responding by assuming that “there may never be another volcano that disrupts the supply chain” is arrogant. Lean supply chain thinking is barely two decades old – it is only just out of short trousers. Eyjafjallajoekull has been around a lot longer.


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